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Indonesia to ban private car owners from using subsidized fuel

10-11-2011 15:46 BJT

by Abu Hanifah

JAKARTA, Oct. 11 (Xinhua) -- The Indonesian government is planning to ban private car owners from taking subsidized fuel so as to save the government's subsidy budget allocation next year.

The plan is expected to go into effect early next year with initial implementation to be conducted in Java and Bali islands, accounting for 59 percent of the country's subsidized fuel or 24 million kiloliters.

The government learned that private car owners in the two Indonesia's key islands have been using 53 percent of subsidized fuel allocation.

Energy and Natural Resources Minister Darwin Zahedy Saleh said on Monday that such a policy is expected to reduce subsidized fuel consumption to 37.8 million kiloliters nationally.

He said that the government was expecting to see subsidized fuel consumption go below 40 million kiloliters nationwide next year.

He said that the plan to ban subsidized fuel consumption by private car owners was part of the government's efforts to limit the consumption of the fuel.

The Indonesian finance minister said that should the subsidized fuel consumption be reduced to 37.8 million kiloliters, the government could save 4.9 trillion rupiah (about 548.5 million U.S. dollars).

On the contrary, should the government fail to limit the fuel consumption, there will be an 8.8 percent increase in subsidized fuel consumption, or 43.7 million kiloliters next year.

A senior official at the country's upstream oil and gas regulator agency of BP Migas said that a stricter ruling is needed to attain the government target to allocate subsidized fuel below 40 million kiloliters.

"It (the ruling) is needed as we are facing people who get noisy every time the subsidized fuel limitation idea surface in the media," Tubagus Haryono, the BP Migas Chairman was quoted by a local media as saying.

The plan to limit subsidized fuel consumption was challenged by the facts that not all gas stations in Java and Bali are equipped with devices to disburse higher octane fuel for private cars.

State-run oil and gas firm Pertamina that operates most of gas stations across the country would need some 232 billion rupiah to equip those gas stations.

International agencies have advised Indonesia to reduce its allocation on subsidized fuel so as to make the budget effective in attaining higher economic growth.

Editor:Wang Xiaomei |Source: Xinhua

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