Indonesian
businesspeople unified the in Indonesia Chamber of Commerce asked President Susilo Bambang Yudhoyono to eliminate
subsidy for oil. They rated that subsidy for oil had eroded state budget and
make infra structure building to be neglected.
This
was disclosed by Chairman of KADIN Suryo
Bambang Sulisto in the National Meeting of KADIN attended
by President Susilo Bambang
Yodhoyono last week in Jakarta [2/10]. Subsidy for oil price should
be written off provided the saved fund be used for enhancing development in the
regions in that case KADIN would support the Government’s policy to reduce or
even completely abolish oil subsidy.
Furthermore
Chairman of KADIN said that APBN Budget was
today being over-burdened due to enormous size of oil subsidy which this
year had come to Rp
216 trillion, while the allocation was off target and tend to be benefited by
the wrong people. Grievances of the
businessworld today was that high amount of subsidy might cause
neglect of development in other sectors which were urgent and indispensable.
KADIN was expecting that with the reduced burden of oil subsidy, the Government
could save money which could be allocated for building infra-structures in the
regions which were urgent.
Chairman
of KADIN also once said that subsidy for oil was no longer appropriate. The
price of one bottle of subsidized oil which was cheaper than a bottle of
mineral water was not reasonable. According to KADIN, subsidy for energy [oil
and electricity] which reached nearly Rp 300 trillion was too big and just to
be burned and vanish.
If
the Rp300 trillions were spent on infra structure and education, many people
could benefit from it. Development of infra-structure for instance would
generate positive impact such as creating job opportunities, to energize
economy while businesspeople would benefit it as well. Compare this to subsidy
for oil and electricity in effect today which was only enjoyed by business
people and the rich.
Previously
the Coordinating Minister Hatta
Rajasa said
that ideally oil subsidy be replaced by direct subsidy, but so far the
Government dared not to exempt subsidy, the reason still unknown. The Board for
Downstream Management of Oil and Gas [BPH Migas] once mentioned about the case of
smuggling of subsidized oil amounting to 1,700 kiloliter [KL] or equal to 170
tanker trucks of oil to South Kalimantan which did not reach the gas stations.
The
Minister of Energy and Mineral Resources Jerro Wacik admitted that lately oil smuggling had been
at large because the price of subsidized oil was too cheap, i.e. Rp4,500 per
liter compared to non -subsidized oil which was priced at around Rp9.700 per liter. Jerro Wacik
did not deny smuggling of subsidized oil going on, although many of them had
been arrested. The fundamental reason was the wide price gap between subsidized
and non- subsidized oil.
Now
it was up to the Government’s resolution to cancel subsidy for oil price. No
matter how hard it might seem in terms of Government’s political image, to
increase oil price should be right as long as the reasoning was well
communicated; surely the public could accept the Government’s decision to
increase price of oil. If the Government was afraid that that their image would
fall, than perhaps the price increase could be done by stages so as not to
upset the public.
By
logic, subsidy for energy must be reduced, and the rest of asset should be
allocated for infra structure and health sectors which could be benefited by
the public. Justice and humanity was felt stronger instead of maintaining subsidy
because apparently it was mostly enjoyed by the rich.
There
should be a simulation by the Government to test how many percent of price
increase could be tolerated by the people. In times when economic growth was
still high, i.e. above 6% this was in fact the right momentum for the
Government to increase oil price. At the same time, development of basic
infra-structure and health in all regions would make more people happy rather
than to continue oil subsidy policy. Indeed a hard decision to make, but for
the long run it would generate more positive impact continuously for this
nation
Business News - October 10, 2012
No comments:
Post a Comment