Widodo mulls raising fuel prices as early as October

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FF1MNKOWGOIndonesia’s President-elect Joko Widodo is considering raising subsidised fuel prices as early as next month as he seeks to free up state funds to invest in Southeast Asia’s largest economy at the start of his term.

“We can’t avoid this solution because we are unable to find other ways to boost revenue in the short term,” Arif Budimanta, a member of Widodo’s economic team, said in an interview in Jakarta late on Tuesday. “Previously, we expected a price increase this month under the current government, but the current government can’t do it. Maybe we can do it in October or November.”

The team is considering three alternative ways of raising fuel prices to curb subsidies: a one-time price increase, a gradual adjustment done every quarter or fixing the subsidy amount, Budimanta said. The administration of Joko, known as Jokowi, will find ways to prevent spikes in food prices and minimise the impact on public transportation when fuel costs rise, he said. It will also come up with plans to allocate cash for poor people, he said.

Fixing the fuel-subsidy programme that has spurred demand for energy imports and deprived the nation of funds for infrastructure development will be a key challenge for Jokowi’s efforts to boost investment and spur economic growth. His team also plans to discuss with the outgoing government ways to adjust the 2015 budget by reallocating funds from goods expenditure to capital spending, Budimanta said.

“We expect this can save about 20 per cent from total ministries’ spending,” he said, referring to the reallocation of funds that could save at least $2.5 billion. The team aims to start revising the 2015 budget in January, he said.

Jokowi, who will take office in October, will in December unveil a plan to restructure permit approval processes to make them easier and faster for investors, Budimanta said.

 

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Reading Time: 2 minutes

Indonesia’s President-elect Joko Widodo is considering raising subsidised fuel prices as early as next month as he seeks to free up state funds to invest in Southeast Asia’s largest economy at the start of his term.

Reading Time: 2 minutes

FF1MNKOWGOIndonesia’s President-elect Joko Widodo is considering raising subsidised fuel prices as early as next month as he seeks to free up state funds to invest in Southeast Asia’s largest economy at the start of his term.

“We can’t avoid this solution because we are unable to find other ways to boost revenue in the short term,” Arif Budimanta, a member of Widodo’s economic team, said in an interview in Jakarta late on Tuesday. “Previously, we expected a price increase this month under the current government, but the current government can’t do it. Maybe we can do it in October or November.”

The team is considering three alternative ways of raising fuel prices to curb subsidies: a one-time price increase, a gradual adjustment done every quarter or fixing the subsidy amount, Budimanta said. The administration of Joko, known as Jokowi, will find ways to prevent spikes in food prices and minimise the impact on public transportation when fuel costs rise, he said. It will also come up with plans to allocate cash for poor people, he said.

Fixing the fuel-subsidy programme that has spurred demand for energy imports and deprived the nation of funds for infrastructure development will be a key challenge for Jokowi’s efforts to boost investment and spur economic growth. His team also plans to discuss with the outgoing government ways to adjust the 2015 budget by reallocating funds from goods expenditure to capital spending, Budimanta said.

“We expect this can save about 20 per cent from total ministries’ spending,” he said, referring to the reallocation of funds that could save at least $2.5 billion. The team aims to start revising the 2015 budget in January, he said.

Jokowi, who will take office in October, will in December unveil a plan to restructure permit approval processes to make them easier and faster for investors, Budimanta said.

 

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