Ina Parlina and Raras Cahyafitri, Jakarta – The government decided on Monday to postpone a plan to impose a levy on sales of fossil-based fuels amid growing controversy over the idea.
With the postponement, the price of Premium gasoline outside Java and Bali will be Rp 6,950 per liter and Rp 7,050 per liter in Java and Bali beginning on Tuesday. Meanwhile, diesel will be sold at Rp 5,650 per liter nationwide.
Under the previous plan, customers were to pay a levy of Rp 200 per liter for Premium and Rp 300 per liter for subsidized diesel. The levy was to be used for an energy security fund.
The decision to postpone the levy was made during a limited Cabinet meeting on Monday afternoon.
Energy and Mineral Resources Minister Sudirman Said announced that the government had decided in the meeting that the establishment of the energy security fund would be deliberated further during the state budget revision with legislators.
However, he said the government would continue preparing the mechanism and regulations related to the implementation of the fund.
"The President and the Vice President have decided that we must prepare everything related to the fund, including regulations. Moreover, the implementation must go through the deliberation of the state budget," Sudirman told a press conference at the Presidential Palace on Monday.
"[This is] so [we] can avoid controversies that were already here and I believe [the issue] is now clear," Sudirman added.
Initially, the government planned to impose the levy on Tuesday, when the new gasoline and diesel prices were to be implemented.
Under the initial plan, the energy security fund was to be managed by Sudirman's office. Sudirman previously said that the levy for the energy security fund would be reviewed every three months, when the government also reviews fuel prices.
The reserve fund was first considered following an overhaul of energy subsidies in late 2014.
The fund, should it be implemented in the future, would be also used to support the electricity sector, to help build strategic petroleum reserves and to diversify energy resources given a 2025 target to have 23 percent of renewable energy in the total energy supply, according to Sudirman.
However, the planned fuel levy has been widely criticized because the government has yet to issue a legal basis for its implementation.
The Energy and Mineral Resources Ministry's director general for oil and gas, IGN Wiratmaja Puja, highlighted that the government would likely need to draft an additional regulation if it wanted to impose the levy on fuel sales to finance the country's energy security program.
Apart from the implementation of new fuel prices starting on Tuesday, Pertamina will also lower prices of a number of its fuels to adjust to the fall of oil prices in the world market.
Pertamina president director Dwi Soetjipto said the company would reduce the price of Pertalite gasoline to Rp 7,900, Pertamax gasoline to a range of Rp 8,600 to Rp 9,600 and non-subsidized diesel fuel to Rp 8,050. The price of 12-kilogram liquid petroleum gas canisters will be lowered by an average of Rp 5,800 per canister.
Source: http://www.thejakartapost.com/news/2016/01/05/fuel-levy-plan-postponed-amid-growing-controversy.html