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Fuel Price Adjustment Solution to Save the State Budget

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The government has adjusted the price of fuel oil ( BBM ) types of Pertalite, Solar and Pertamax. This is because since the beginning of the year, world crude oil prices have continued to climb. Even in March had penetrated more than 100 US dollars per barrel.

Related to this, the Dean of the Faculty of Economics and Business, University of Indonesia who is also an Economic Observer, Teguh Dartanto, said that fuel price adjustments are the best policy that must be taken so that the State Budget is not in deficit and this is also carried out in every period of government. This is because the state is thinking about the long-term impact of rising world oil prices so that the state budget does not run into a deficit.

“When the government has raised the price of fuel , the implications are quite numerous in the macroeconomic context. The first is that the APBN fiscal is healthier and the second is that this price adjustment will reduce fuel consumption and reduce imports of fuel , so as to ease pressure on the exchange rate. ,” he said.https://09f7e4e3c25f4f3cbb8d7950c3dec87d.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Meanwhile, UGM senior economic observer who is also the former Head of Wantimpres Sri Adiningsih said it was important to keep the state budget from running into a deficit. The reason is, the state budget functions not only for fuel subsidies , but also to mitigate the impact of the Covid-19 pandemic and restore the national economy.

“The government’s desire to adjust fuel prices is certainly based on many considerations. This policy, not only maintains the stability of the state budget , but also spurs the welfare of the community and the readiness of budget support for solving other problems,” he added.

The Executive Director of Next Policy, Fithra Faisal Hastiadi, said the same thing, that various indicators show that Indonesia’s economic condition is solid enough to deal with the impact of the subsidized fuel price adjustment .

This good condition of the Indonesian economy is indicated by the national deflation announced by BPS recently, which was minus 0.21 percent in the second quarter of 2022. 

“This is the largest deflation after 2019. It means that inflationary pressure has started to subside. Also on an annual basis, inflation in August was 4.69 percent, (compared to) July, which was 4.9 percent, that’s also deflation,” said Fithra Faisal.

The government should take advantage of this momentum to reduce the burden of fuel subsidies which have disrupted the fiscal stability of the State Budget .

“This means that our economy is now solid, inflationary pressure is not too big, tends to fall, so now is the momentum for fuel price adjustments ,” said Fitra.

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