Pricey oil may cost more in subsidy spending

Limited options: Workers on a drilling rig in the United States. The surge in Brent prices globally has caused the Indonesian government to keep prices of subsidised fuel and LPG capped. —Bloomberg

JAKARTA: The government may need to spend 190 trillion rupiah (US$13.23bil or RM56.63bil) more than planned to cover swelling subsidies, as surging international oil prices drive up the cost of fuel imports.

The Energy and Mineral Resources Ministry estimated that subsidies and compensation for gasoline, diesel and liquefied petroleum gas (LPG) may swell to 320 trillion rupiah (RM95.38bil) this year, more than double the 130 trillion rupiah (RM38.75bil) assumed in the state budget plan.