Ayomi Amindoni, Jakarta – The government should consult with the House of Representative before imposing a fuel levy as such a levy had no legal basis and could even spark a political uproar, according to an energy expert.
Reforminer Institute executive director Komaidi Notonegoro said Law 30/2007 mandated that the government go through the state budget mechanism with the House of Representatives before implementing a fuel levy.
"If the fund were to be imposed early January 2016, it would have no chance for a discussion with the House because the 2016 state budget has been sealed. If the government wants to implement a fuel levy, they must wait for the state budget revision," he told thejakartapost.com on Thursday.
He warned of political risks if the government insisted on imposing the levy on Jan. 5. "The purpose of the measure is good but without careful execution, there will be political turmoil."
Energy and Mineral Resources Minister Sudirman Said claimed that the energy security fund was enshrined in the 2007 Energy Law and Government Regulation (PP) 79/2014 on national energy policy.
However, PP 79/2014 stipulates that a premium shall be imposed on contractors of nonrenewable resources, not on the public. The government uses the funds gathered from exploitative activities to maintain the sustainability of energy resources.
According to the plan, the government will collect Rp 200 from every liter of Premium and Rp 300 from every liter of subsidized diesel.
A sensitive matter Komaidi recommended that the government discuss the levy with the House, mainly because the levy will burden consumers and that is always a politically sensitive matter.
"An additional rule is necessary, otherwise the levy would be considered illegal. As it is related to the public interest, it should be discussed first with the House," he said.
Furthermore, Komaidi urged the government to review the levy. Instead of charging the public, he suggested that an energy security fund be taken from state revenues from oil-and-gas, which stood at around Rp 350 trillion per year.
Alternatively, the government could raise the fund from an alternative source, such as a 10 percent value added tax or a 5 percent tax on vehicle fuel.
"Instead of charging the consumers with additional costs, the government should increase the vehicle fuel tax," he said. (ags)