Indonesia to Implement Fixed Gasoline Subsidy Amid Growing Oil Prices

Indonesian finance ministry intends to ask the President for a fixed gasoline subsidy of at least $0.08 per liter due to a recent oil price hike, a government official told Bloomberg.

MOSCOW, November 27 (Sputnik) — Indonesia’s finance ministry plans to submit a proposal to President Joko Widodo for a fixed gasoline subsidy of at least $0.08 per liter following a recent price hike, a government official told Bloomberg Thursday.

The finance ministry will submit the proposal, intended to be implemented by 2016, to grant a gasoline subsidy of 1,000 rupiah ($0.08) to 2,000 rupiah ($0.16), according to a government official who spoke to the news outlet under anonymity.

The unnamed official echoed a statement given by the country’s Finance Minister Bambang Brodjonegoro at a forum on Wednesday. The minister said that the government would implement a fixed subsidy regime to protect oil prices from volatility.

During his run for presidency in July, Widodo, known as Jokowi, promised to divert more funds to the development and overhaul of Indonesia’s economy, the largest in Southeast Asia. In line with this plans, the president recently raised fuel prices aimed at reducing state energy subsidies, as reported by Bloomberg.

The price of subsidized gasoline was increased to 8,500 rupiah ($0.69) a liter from 6,500 rupiah ($0.53).

If Jokowi agrees to the proposal the finance ministry will send it to the country’s parliament for approval.