Key Points
- Indonesia increased the cost of subsidized fuel by an additional 30% on Saturday (September 3).
- Subsidized gasoline now costs 10,000 rupiahs per liter, and subsidized diesel costs 6,800 rupiahs per liter.
- The Indonesian government plans to reign the ballooning budget from reaching 698 trillion rupiahs.
Indonesia made the executive decision to increase subsidized fuel costs by nearly 30% of the previous amount. The raise took place on Saturday (Sep 3). Furthermore, the Indonesian government intends to control the ballooning subsidies by increasing subsidized fuel costs.
According to Arin Tasrif, energy minister, the cost of subsidized gasoline rose to 10,000 rupiahs per liter, and subsidized diesel cost rose to 6,800 rupiahs. The values of the subsidized fuel rose from 7,650 and 6,800, respectively. However, this decision can lead to mass protests from the people.
“I actually wanted domestic fuel prices to remain affordable by providing subsidies, but the budget for subsidies has tripled and will continue to increase,” said President Joko Widodo, addressing a news conference. “Now, the government has to make a decision in a difficult situation. This is the government’s last option.”
Indonesia, Southeast Asia’s largest economy, already faces a shocking 502 trillion rupiah in energy subsidies. The energy subsidies for 2022 account for up to three times the original budget. Moreover, the devaluing rupiah currency and oil prices further pushed Indonesia against a wall.
The Indonesian government believes the subsidy budget will likely balloon to 698 trillion rupiahs with the price increase. Hence Indonesia, like the rest of the world, faces the brunt of the present global economic crisis.
Reference,
https://www.channelnewsasia.com/asia/indonesia-hikes-fuel-prices-rein-ballooning-subsidies-2919311
