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Signs of markups in fuel subsidy calculations: ICW

Source
Jakarta Globe - March 30, 2012

Markus Junianto Sihaloho & Agus Triyono – Indonesia Corruption Watch has asked the antigraft commission and the state's audit body to check the government's fuel subsidy calculation in the budget bill after finding alleged markups in the numbers.

Firdaus Ilyas, ICW's coordinator for budget monitoring, said that the antigraft group would demand both the Corruption Eradication Commission (KPK), and the Supreme Audit Agency (BPK), to do their jobs regardless of whether the government increases subsidized fuel prices.

"We will report to the KPK that there is an indication of corruption in the government's formulation of the budget while asking the BPK to conduct audit on the subsidy calculation," he said.

With its assumptions – an international crude oil price of $105 per barrel, a 40 million kiloliter quota for subsidized fuel consumption and a 3.61 million ton quota for LPG consumption – the government says the subsidy cost will reach Rp 178 trillion ($19.4 billion) without an increase in fuel prices.

If fuel prices were increased by Rp 1,500 per liter, then the subsidy amount would stand at Rp 133.2 trillion, the government says.

However, the ICW calculated that without increasing fuel prices, the subsidy amount would only be Rp 148.1 trillion. If the government raised the fuel prices by 33 percent, the subsidy would only reach Rp 68.1 trillion. Firdaus said that based on his group's calculation, there were markups of Rp 30 trillion and Rp65 trillion in each scenario.

"Why do we have different results? The government should be transparent in their calculations. That's why we are asking both the KPK and BPK to check them," he said.

Firdaus said that ICW's calculations have been cross-checked with data from political parties, especially those from the Indonesian Democratic Party of Struggle (PDI-P). "Our data and calculations are valid. We have verified them before making them public," he said.

Theodorus Jacob Koekritz, a member of PDI-P's budget division, agreed with ICW's calculations, saying the party had reached the same conclusion. "Now, we are convinced that the government is hiding something," he said.

Meanwhile, a number of religious leaders, academics and activists filed a motion to the Constitutional Court, asking it to scrap several articles 2001 law on oil and gas, saying they have caused significant state losses but only benefitted foreign firms.

"We have noted that foreign companies own 89 percent of our oil and gas sectors. The law has violated the Constitution and that's why we will have it scrapped," said Din Syamsuddin, the chairman of religious organization Muhammadiyah.

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