Indonesia proposes to raise spending on fuel subsidy

The Indonesian government has proposed to raise spending on fuel subsidy by 11.1%, from Rp123.6 trillion (US$13.57 million) to Rp137.4 trillion (US$15.09 billion), in the revised 2012 state budget. The Finance Ministry explained that the increase is due to rising crude oil prices, which the government expects to average at US$105 per barrel, and the extra subsidy of Rp54billion (US$5.8 million) for the fuel-to-gas conversion program. The government will prevent subsidized oil consumption from exceeding 40 million kiloliters by reducing consumption, which will be carried out using various measures. These measures include kerosene-to-gas conversion, gasoline-to-gas conversion, adoption of alternative energy, as well as limiting consumption of oil products. (March 9, 2012)