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Subsidies, especially on fuel oil (BBM) are needed so that people who cannot afford it can access affordable fuel. However, fuel subsidy This has a problem because the rich people’s vehicles are ‘drink’.
Problem fuel subsidy this then adds up. When oil prices skyrocket, the government disbursed budget for fuel subsidies is getting bigger.
Indeed, Indonesia is not the only one implementing a fuel subsidy policy. Several countries also provide subsidies so that the fuel purchased by the public is relatively affordable.
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Quoted from the International Energy Agency (IEA), Sunday (10/7/2020), falling fossil fuel prices and overall energy consumption have lowered overall fossil fuel subsidies to a record low of US$ 180 billion, down 40% compared to 2019 According to the IEA, this figure is the lowest level since 2007.
However, in 2021, the subsidy will increase to US$ 440 billion or almost back to the 2018 level. This is because energy prices are recovering in line with increasing energy consumption. Meanwhile, policymakers are hesitant to undertake subsidy reforms during an uncertain economic recovery.
The IEA itself says it has long advocated the elimination or reduction of energy subsidies. This is because subsidies distort markets, send users the wrong price signal, widen developing country fiscal deficits, and prevent the adoption of cleaner, renewable energy.
The IEA report also states that oil is the most subsidized fuel. Followed by gas and electricity.
In 2020, Iran is the country that provides the most subsidies for fossil fuels. Then, followed by China and India.
In order, the next countries are Saudi Arabia, Russia, Algeria or Algeria, Egypt, Indonesia, United Arab Emirates until the last position in the top 25 is Qatar.
From these data, countries that provide fuel subsidy on fuel oil, namely Iran at US$ 5.0 billion, China US$ 21.7 billion, India US$ 17.1 billion, Saudi Arabia US$ 8.6 billion, Algeria US$ 5.8 billion, Egypt US$ 5.3 billion, Indonesia US$ 6.9 billion, Venezuela 4.3 billion, Iraq US$ 2.9 billion, and several other countries.
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