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The Transfer of Fuel Subsidy Increases Justice and People’s Welfare

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So far, the state-run APBN continues to be burdened with up to IDR 502 trillion just to provide fuel subsidies, which is still not right on target because 70 percent is enjoyed by the wealthy.

Head of Fiscal Policy at the Ministry of Finance of the Republic of Indonesia, Febrio Nathan Kacaribu, explained that there had been inaccurate predictions regarding oil prices. Previously the price of crude oil was projected to be 63 US Dollars per barrel, but in fact it continued to shoot up to 100 US Dollars per barrel.

“Although commodity prices have been high since May, the Ministry of Finance assumes it will be 100 per barrel for the price of crude oil, while initially assuming it is 63, this makes the allocation for subsidies and compensation for energy more than 3 times, from 152 to 502. trillion,” he explained.

On the other hand, with the skyrocketing world crude oil prices, it is also offset by continuing to increase the consumption of Indonesian people’s BBM. This then makes the burden on the state budget funds even more.

“Then with the latest developments, commodity prices are still increasing and the volume consumed by the public is also increasing, because the economy is also growing very strongly. This is then a consideration for the Ministry of Finance because the possibility of an increase in subsidies and energy compensation will be too large, “explained Febrio.

Then on the other hand, even with the amount of state budget expenditures that have been made, in fact the distribution of fuel subsidies in the field is still not on target.

“After an evaluation, this subsidy is not on target because more than 70% who enjoy this energy subsidy and compensation turn out to be those who are in the wealthy group who own a vehicle and are not actually the target of this subsidy,” said the Head of Fiscal Policy at the Ministry of Finance.

Therefore, in the end, the government adopted a policy of adjusting fuel prices with the aim of diverting the use of the very large APBN.

Febrio again added that one of the main objectives of the budget reallocation carried out was to uphold the principle of justice for the community.

“Thus, as directed by the president, the Ministry of Finance has reallocated/transferred part of the subsidy and compensation, which is clearly not right on target and we want to be more equitable, so we made the decision to transfer it and currently we are transferring 24.17 trillion in amount and that is for three major programs. , ” he said.

However, it will not only be converted into function, but the government will also provide subsidies to people who really need it so that this policy will become much more targeted.

“The government is reallocating the subsidy by providing and providing wage subsidies for workers whose income is below Rp. 3,500,000. This is mainly to ensure that we make more subsidies and energy compensation according to the target, namely those who are entitled to those who are less well off,” he concluded.

Meanwhile, Energy Watch Executive Director Mamit Setiawan said that the best savings in the state budget that the government could do was to divert it for productive purposes only.

“In order to make savings, I think the fuel subsidy can be diverted to more productive activities,” said Mamit

Furthermore, he revealed that the APBN would be much more useful if it could be allocated properly, namely in the development of the education, health and other infrastructure sectors that can improve people’s welfare.

“These activities include school scholarships, assistance to fishermen and farmers, construction of hospitals, schools and other infrastructure,” he added.

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