Jakarta, CNBC Indonesia – The government through the Minister of Finance Sri Mulyani Indrawati has drawn up a strategy to ward off fluctuations in world crude oil prices. The reason is that the increase in world crude oil prices will have a propagation impact on various prices for needs in the community.
The Director General of Budget at the Ministry of Finance, Isa Rachmatawarta, explained that high world oil prices will certainly have an impact on increasing state spending, especially in terms of energy subsidies.
The Ministry of Finance noted that the increase in Indonesia’s Crude Price (ICP) is currently in the range of US$ 79.63 per barrel, much higher than the assumption of the 2022 State Budget which is only US$ 63 per barrel. Meanwhile, the average ICP in December to January 2021 is US 50.48 per barrel.
Unfortunately, said Isa, although the increase in ICP has a positive impact on acceptance. However, his party will also anticipate the increase in spending to increase energy subsidies.
“Moreover, people’s mobility has increased and the use of fuel has also increased now compared to the last two years,” explained Isa in a press conference on our State Budget, Monday (28/3/2022).
The government still seems unable to make a decision on what policy to take next. The reason is, if the fuel price is then adjusted, on the one hand the community’s economy has not fully recovered.
The increase in fuel prices will also increase domestic inflation, which in turn can have an impact on the overall economic recovery. Therefore, any energy subsidy bearing, like it or not, must also be prepared.
“We will continue to observe the impact of this oil price and its response, will ensure stability and supply of basic commodities and energy for the community, as well as affordable for the community,” explained Isa.
“If then price adjustment will be an option later. The government ensures that it will provide social assistance, and strengthen social protection to maintain a balance of purchasing power and ensure that basic materials and energy are available,” Isa continued.
However, if the government decides to delay the price increase, the way the government will take is to provide compensation to business entities, in this case Pertamina.
“This is important for business entities to be able to carry out their functions and duties. So they don’t collapse. This continues to be a monitoring and compensation payment to business entities,” explained Isa.
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