Indonesia to spend more on energy subsidies this year

Indonesia will spend more than budgeted on energy subsidies this year because fuel consumption is likely to rise at the same time parliament keeps electricity price increases to a minimum, a government minister and state oil company official said. Chief Economic Minister Hatta Rajasa told reporters that the electricity subsidy could rise by 2.4 trillion rupiah (US$266.07 million) to 56.9 trillion rupiah (US$6.3 billion) this year because power tariffs would only rise by 10%. The subsidy was originally forecast at 54.5 trillion rupiah (US$6.04 billion) in the 2010 budget as the government had planned to increase electricity tariffs by 15% in July. State oil and gas company Pertamina, meanwhile, has asked parliament to raise the volume of subsidized gasoline and diesel oil as consumption was also estimated to be higher than expected, Company Secretary Toharso told Reuters. (April 27, 2010)