Govt Chooses Fuel Restriction Policy

Despite criticism from the public, the government finally announced a policy to restrict  subsidized fuel use. President Susilo Bambang Yudhoyono issued Presidential Regulation No. 15 of 2012, dated 7 February 2012, to establish the fuel restriction policy.

As previously reported, the government insisted on implementing the policy in order to increase efficiency and cut the State Budget. The government also wants subsidized fuel to be distributed correctly. Agus Martowardojo, Minister of Finance, said the policy is in line with Law No. 22 of 2011 on the 2012 State Budget. Therefore, the fuel restriction policy will be implemented on 1 April 2012.

"The policy will be executed on 1 April 2012 in the Java and Bali areas," said Agus at a press conference on "Current Macroeconomic Development", in Jakarta, Tuesday (14/2).

Agus, however, admitted that the government and the House are still discussing fuel price increases to supplement the fuel restriction policy. Anny Ratnawati, Deputy Minister of Finance, also confirmed this and stated that, "[a]ny policy, such as restrictions, price increases, and subsidy limits, is possible as long as the State Budget remains sustainable."

Even though the fuel restriction policy has already been issued, many parties, especially entrepreneurs, are still criticizing the government. M Reza Rajasa, Head of Mining and Forestry at the Indonesian Young Entrepreneurs Association (HIPMI), asserted that price increases are more reasonable than fuel restrictions. He also claimed that the fuel restriction policy does not have clear implementation procedures.

"The government differentiated between yellow plates [public transportation], black plates [private vehicles], RFID, and smart cards. However, the mechanism is unclear," said Reza at HIPMI's office, Tuesday (14/2).

Reza, however, agreed with government's plan to convert petrol to natural gas, which will support the fuel restriction policy. "However, the government is not strong enough to implement it. The government did not prepare facilities and equipment such as converter kits and natural gas stations," Reza emphasized.

(Fitri Novia Heriani / Antara / Pirhot Nababan)