Indonesians must prepare for a potential hike in fuel prices as the government looks to control its ballooning energy subsidies amid high global oil prices, a cabinet minister said.
South-East Asia’s largest economy has tripled this year’s energy subsidy budget to 502 trillion rupiah (RM152bil) in order to keep some fuel prices and power tariffs unchanged and manage inflation.
However, this may not be enough as nearly all of the subsidised fuel quota has already been used, according to the finance ministry.
Indonesia’s Investment Minister Bahlil Lahadalia said if the government has to increase the quota for subsidised gasoline to 29 million kilolitres from 23 million kilolitres, and assuming oil prices stay elevated and the rupiah weak, the subsidy bill could rise to up to 600 trillion rupiah (RM180.8bil).
“Please convey to the people that my feeling is we have to get ready in case a fuel price hike happens,” Bahlil said. — Reuters