Govt Must Reconsider Fuel Restriction Policy

The government has not established its position on the subsidized fuel policy. Currently, there are two potential options: increasing the price of subsidized fuel and implementing a fuel restriction policy. Many parties prefer implementing a fuel restriction policy.

During a public discussion at Universitas Indonesia, Jakarta, Thursday (9/2) the fuel restriction policy was heavily criticized. Marzuki Ali, Speaker of the House, stated that the fuel restriction policy, which will be implemented in April 2012, will be difficult to execute. He argued that the policy will discriminate against consumers. "As long as there is a consensus between the government and parliament about the 2012 State Budget, fuel prices can be increased," said Marzuki.

He further asserted that the government should consider the impact of a fuel-related policy, instead of focusing solely on calculating the subsidy and State Budget quota. "The government can add the subsidy, implement the restriction, and increase the price at the same time. But the long-term impact should be considered. What will happen in 2013 and the near future," he emphasized.

The government, said Marzuki, should think about alternative energy to optimize oil fuel use, particularly since the amount of oil decreases year after year. He suggested accelerating the conversion from oil fuel to gas fuel, Pertamax type development, and public transportation development.

Meanwhile, former Head of the Oil and Gas Downstream Regulatory Agency (BPH Migas) Tubagus Haryono echoed Marzuki's opinion. Tubagus said the fuel restriction policy will be difficult to implement, and pointed out that only 14.47 percent of subsidized fuel is distributed correctly. Many speculators are involved in the distribution of subsidized fuel.

Anggito Abimanyu, an economist from Gadjah Mada University, asserted that the oil to gas conversion will face some obstacles due to unsolved problems, such as the irrational price gap between subsidized fuel and gas. Subsidized fuel is cheaper than liquefied gas for vehicles (LGV).

He explained that the price of compressed natural gas (CNG) is IDR 4,100/liter, and the price for LGV is IDR 5,500/liter; meanwhile, premium fuel is IDR 4,500/liter. Furthermore, the feasibility of converter equipment has not been proven yet, and there are not enough stations that provide gas. Anggito recommended increasing the price of subsidized fuel from IDR 500 to 1.000 per liter.

However, Anggito criticized the House for rejecting the fuel restriction policy. He explained that the policy is mandated by Article 7 (7) of 2012 State Budget. The House, according to Anggito, should also be responsible, because they approved the price increase prohibition.

(M Agus Yozami / Pirhot Nababan)