Luhut added that the current fuel price in Indonesia is very cheap when compared to other countries in the world.
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said that next week President Joko Widodo (Jokowi) will speak publicly about the decision to increase fuel prices.
So far, subsidies issued through the state budget to hold fuel prices have been too burdensome for state finances.
"Increasing the price of Pertalite which we subsidize quite a lot and also diesel, the economic modeling (calculations) have been made. Maybe next week the President will announce what and how about this price increase," said Luhut in a Public Lecture at Hasanuddin University. which was broadcast virtual, Friday (19/8/2022).
"The president has indicated that it is impossible for us to continue this way," said Luhut.
Luhut added that the current fuel price in Indonesia is very cheap when compared to other countries in the world.
Luhut said the government wanted to reduce the subsidy burden to well below Rp502 trillion as it is now.
Various steps are also prepared to make this happen. For example, the transfer of vehicles from fuel-based to electricity-based, to the use of B40 palm oil blended gasoline.
"Because yesterday our subsidy was Rp 502 trillion, we hope it can be pushed down. For example, by reducing motors and combustion cars to replace electricity, then B40," said Luhut as quoted from detik.com.
Luhut assessed that the increase in fuel prices would clearly have a major impact on the inflation rate in Indonesia. However, the impact of inflation is being calculated in detail by the government so that the public will not be burdened with the increase in fuel prices. (photo: illustration)
