Jakarta – Finance Minister Sri Mulyani Indrawati has said the realization of this year's energy subsidy is estimated to be 173 percent higher than the projection stated in the 2018 state budget.
"The energy subsidy is estimated to reach Rp 163.5 trillion (US$11.35 billion) this year from the initial projection in the state budget of Rp 59.51 trillion," Sri Mulyani said when presenting a 2018 budget outlook before members of the House of Representatives' budget committee in Jakarta on Tuesday.
The energy subsidy was included into non-ministry budgets with a total allocation of Rp 640 trillion, this year, the minister added.
The government spent Rp 59.51 trillion on the energy subsidy in the first half of 2018 and in the second half it was projected to spend Rp 103.98 trillion, Sri Mulyani said.
The subsidy is allocated for state-owned oil and gas company Pertamina, which is tasked by the government with stabilizing fuel prices and for state-owned electricity company PLN because the government has prohibited the company from increasing electricity tariffs this year.
"PLN is also required to carry out an expansion of the village electrification program," the minister said as reported by kompas.com.
The decision on the new subsidy figure was made during a meeting involving the Finance Ministry, the State-Owned Enterprises Ministry, the Energy and Mineral Resources Ministry and PLN after considering the financial situation of PLN, Sri Mulyani added.
"The policy was made to maintain people's purchasing power and to maintain growth momentum as well as to stabilize the economy amid strong external pressure," she added. (bbn)