Lenny Tristia Tambun, Jakarta – The government has agreed on a budget of Rp 22 trillion for a cash assistance program to be distributed immediately among low-income families and workers, Finance Minister Sri Mulyani Indrawati said on Monday.
The minister, however, declined to respond when asked if the program signaled imminent hikes in subsidized fuel prices.
She did explain that the cash aid program is part of the "shift" in fuel subsidy spending.
Sri Mulyani said state postal company Pos Indonesia will transfer Rp 12.4 trillion to 20.65 million low-income families or Rp 600,000 each in two phases. The Social Affairs Ministry will oversee the distribution.
"The president also instructed us to help 16 million workers whose maximum monthly salary is Rp 3.5 million, with a total budget of Rp 9.6 trillion," she said, adding that the manpower minister will be in charge of executing this program.
She said the program, which will commence later this week, is meant to cushion the price rises and safeguard the power of purchase among the most vulnerable.
In addition, regional governments are asked to spare 2 percent of their funding from the central government to be spent on public transportation subsidies, further fueling speculations that fuel prices will see a hike anytime soon.
President Joko Widodo has indicated that his government is considering raising the prices of subsidized fuel products to ease pressures on the state budget after it revealed that the cost to keep fuels and electricity affordable may exceed the ceiling budget of Rp 502 trillion ($34 billion) this year alone.
Indonesia is heavily subsidizing fuel products, such as gasoline product called Pertalite which sells at as low as Rp 7,650 [$0.5] per liter.