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126818
Wed, 06/09/2010 - 01:11
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News Focus: PLAN TO SCRAP FUEL SUBSIDY FOR MOTORCYCLISTS RECEIVES MIXED REACTIONS
By Suharto
Jakarta, June 8 (ANTARA) - In yet another effort to reduce the burden of the state budget, the government is seeking to abolish premium-grade gasoline subsidy for motorcyclists across the country.
However, the idea of abolishing the subsidy has sparked mixed reactions with the Indonesian Consumers Protection Foundation (YLKI) asking the government to reconsider the plan.
"I think the government needs to weigh the idea of abolishing the fuel subsidy wisely before deciding to do so, especially because it is to affect the interest and fate of low-income people," the chief of YLKI branch in Medan, Abubakar Siddik, said early this month.
Should the government really decide to abolish the fuel subsidy the decision would not only add to the misery of motorcyclists but also cause unrest in the community, he said.
"We can easily imagine what will happen if motorcyclists cannot use their motorcycles merely because they cannot afford to buy pertamax (non-subsidized) gasoline," he said.
The Gorontalo Municipal Legislative Assembly (DPRD) said last Wednesday it favored the idea of restricting the use of subsidized fuel oil provided the government can ensure that the move will not add to the burden of low-income people.
"As long as the central government can guarantee that the policy will not burden low-income people, it's okay," Muhazir Abdullah, chief of the DPRD's commission B, said.
After all, he said the restriction should be applied to the owners of motorcycles with an engine capacity of more than 2,000 cc.
"I think the owners of motorcycles with an engine capacity of less than 2,000 cc are not subject to the restriction," he said.
If the restriction is also to be imposed on people who rely on motorcycles for their livelihood, the policy will add to their financial burden, he said.
"That will amount to burdening the public. And if that is the case, it is not a policy," he said.
Member of the Commission C of the North Sumatra Provincial Legislative Assembly (DPRD) Meilizar Latif said last Wednesday the government's plan to restrict the use of subsidized fuel oil, if realized, can save a budget spending of up to Rp109 trillion this year.
"Of course, we support the plan to restrict the use of subsidized fuel oil, provided the funds saved can really be used to develop public utilities and infrastructure facilities. This means that the lifting of the subsidy must have clear objective, to improve the people's living standards," he said.
Data from the Indonesian Motorcycle Industry Association show there are currently more than 35 million motorcycles in the country, and 6 million to 7 million of them are to be found in Jakarta. On average each motorcycle consumes 2 liters of gasoline per day.
The House of Representatives (DPR) has asked the government to consider the purchasing power of the public in restricting the use of subsidized fuel oil.
Chairman of the House Commission VII Teuku Rifky Harsya said it is time for the government to restrict the use of subsidized fuel oil but the move must be based on an indepth study.
The government has set itself the target of accomplishing the study of restricting the use of subsidized fuel oil by June 2010. The results of the study will later be put to the test in Java in August 2010.
Under the project, the government aims to reduce the use of subsidized fuel oil by 4 million kiloliters this year.
In the revised 2010 state budget, subsidized fuel oil consumption has been set at 36.5 million kiloliters.
State oil and gas company PT Pertamina has predicted that the country's subsidized fuel oil consumption in 2011 will reach 42.5 million kiloliters, a 6-percent increase compared to this year's consumption forecast of 40.1 million kiloliters.
"The increase in fuel consumption has already taken into account the forecast of economic growth and the increase in the number of motor vehicles," Pertamina Marketing and Commercial Director Djaelani Sutomo said here on Monday.
Earlier, the Downstream Oil and Gas Regulatory Agency (BPH Migas) said the country's subsidized fuel oil consumption this year was projected to soar to 40.1-40.5 million kiloliters, well above the quota of 36.5 million kiloliters set in the revised 2010 state budget.
The agency said the surge in subsidized fuel consumption was caused by higher-than-expected premium grade gasoline consumption.
Meilizar Latif said the outstanding difference between the fuel oil consumption forecast by BPH Migas and the state budget quota will burden the state budget. "These all happen due to a significant increase in the number of motor vehicles," he said.
Under the road map for subsidized fuel oil retrenchment, the government is expected to introduce a closed distribution system starting next year.
The move is aimed at ensuring that the oil subsidy will go to those entitled to it.
Jakarta, June 8 (ANTARA) - In yet another effort to reduce the burden of the state budget, the government is seeking to abolish premium-grade gasoline subsidy for motorcyclists across the country.
However, the idea of abolishing the subsidy has sparked mixed reactions with the Indonesian Consumers Protection Foundation (YLKI) asking the government to reconsider the plan.
"I think the government needs to weigh the idea of abolishing the fuel subsidy wisely before deciding to do so, especially because it is to affect the interest and fate of low-income people," the chief of YLKI branch in Medan, Abubakar Siddik, said early this month.
Should the government really decide to abolish the fuel subsidy the decision would not only add to the misery of motorcyclists but also cause unrest in the community, he said.
"We can easily imagine what will happen if motorcyclists cannot use their motorcycles merely because they cannot afford to buy pertamax (non-subsidized) gasoline," he said.
The Gorontalo Municipal Legislative Assembly (DPRD) said last Wednesday it favored the idea of restricting the use of subsidized fuel oil provided the government can ensure that the move will not add to the burden of low-income people.
"As long as the central government can guarantee that the policy will not burden low-income people, it's okay," Muhazir Abdullah, chief of the DPRD's commission B, said.
After all, he said the restriction should be applied to the owners of motorcycles with an engine capacity of more than 2,000 cc.
"I think the owners of motorcycles with an engine capacity of less than 2,000 cc are not subject to the restriction," he said.
If the restriction is also to be imposed on people who rely on motorcycles for their livelihood, the policy will add to their financial burden, he said.
"That will amount to burdening the public. And if that is the case, it is not a policy," he said.
Member of the Commission C of the North Sumatra Provincial Legislative Assembly (DPRD) Meilizar Latif said last Wednesday the government's plan to restrict the use of subsidized fuel oil, if realized, can save a budget spending of up to Rp109 trillion this year.
"Of course, we support the plan to restrict the use of subsidized fuel oil, provided the funds saved can really be used to develop public utilities and infrastructure facilities. This means that the lifting of the subsidy must have clear objective, to improve the people's living standards," he said.
Data from the Indonesian Motorcycle Industry Association show there are currently more than 35 million motorcycles in the country, and 6 million to 7 million of them are to be found in Jakarta. On average each motorcycle consumes 2 liters of gasoline per day.
The House of Representatives (DPR) has asked the government to consider the purchasing power of the public in restricting the use of subsidized fuel oil.
Chairman of the House Commission VII Teuku Rifky Harsya said it is time for the government to restrict the use of subsidized fuel oil but the move must be based on an indepth study.
The government has set itself the target of accomplishing the study of restricting the use of subsidized fuel oil by June 2010. The results of the study will later be put to the test in Java in August 2010.
Under the project, the government aims to reduce the use of subsidized fuel oil by 4 million kiloliters this year.
In the revised 2010 state budget, subsidized fuel oil consumption has been set at 36.5 million kiloliters.
State oil and gas company PT Pertamina has predicted that the country's subsidized fuel oil consumption in 2011 will reach 42.5 million kiloliters, a 6-percent increase compared to this year's consumption forecast of 40.1 million kiloliters.
"The increase in fuel consumption has already taken into account the forecast of economic growth and the increase in the number of motor vehicles," Pertamina Marketing and Commercial Director Djaelani Sutomo said here on Monday.
Earlier, the Downstream Oil and Gas Regulatory Agency (BPH Migas) said the country's subsidized fuel oil consumption this year was projected to soar to 40.1-40.5 million kiloliters, well above the quota of 36.5 million kiloliters set in the revised 2010 state budget.
The agency said the surge in subsidized fuel consumption was caused by higher-than-expected premium grade gasoline consumption.
Meilizar Latif said the outstanding difference between the fuel oil consumption forecast by BPH Migas and the state budget quota will burden the state budget. "These all happen due to a significant increase in the number of motor vehicles," he said.
Under the road map for subsidized fuel oil retrenchment, the government is expected to introduce a closed distribution system starting next year.
The move is aimed at ensuring that the oil subsidy will go to those entitled to it.
