The government\u2019s plan to restrict purchases of subsidised Pertalite\nfuel is considered to have the potential to create a significant\neconomic impact for people who will no longer be able to access the\nfuel. Economist at the Center of Reform on Economics (CORE) Yusuf Rendy\nManilet said that in terms of scale, the policy is not a small\nrestriction. Currently, Pertalite is priced at Rp10,000 per litre, while\nPertamax is sold at around Rp15,950 per litre. As a result, people who\nlose access to Pertalite and must switch to Pertamax will face an\nincrease in fuel purchase costs that effectively approaches 60%.<\/p>\n
\u201cSo even though the government is not raising the price of Pertalite,\nfor people who are no longer allowed to buy it, the economic impact is\nstill felt like a price increase,\u201d Yusuf said when contacted on Tuesday\n(18\/8).<\/p>\n
From a fiscal perspective, Yusuf considers the benefits of\nrestricting Pertalite to be relatively limited compared with the\neconomic impact that may be felt by the public. He estimates that\nhouseholds in the 9th and 10th deciles use around 23% of the total\nnational Pertalite volume. If the restriction proceeds according to\nvarying levels of compliance, potential budget savings are estimated to\nbe in the range of Rp8.9 trillion to Rp17 trillion.<\/p>\n
\u201cCompared with energy subsidy and compensation spending that reaches\nhundreds of trillions of rupiah, the savings are only a small portion,\u201d\nhe explained.<\/p>\n
Yusuf added that the price difference between Pertalite and Pertamax\nalso does not entirely become state revenue. Part of the difference\nrelates to regional tax components and business margins.<\/p>\n
Therefore, according to him, the government needs to calculate the\nfiscal benefits more comprehensively by considering administrative\ncosts, political consequences, and the economic burden that could\npotentially shift to households.<\/p>\n
In terms of inflation, Yusuf estimates that the direct impact of\nPertalite restrictions is likely to be relatively small, but that does\nnot mean it is non-existent. Administratively, the price of Pertalite\nhas indeed not increased. However, if some consumers switch to Pertamax,\nwhich has a higher price, the average price of petrol paid by the public\ncan still rise and potentially be reflected in inflation figures. This\ncondition needs attention because annual inflation in July has already\nreached 2.88%.<\/p>\n
\u201cMoreover, annual inflation in July is already 2.88%,\u201d he said.<\/p>\n
According to Yusuf, the government should not implement the\nrestriction suddenly. The policy is considered safer if carried out\ngradually so that the public has time to adjust.<\/p>\n
He assesses that the greatest risk may actually emerge from groups of\nworkers who use vehicles as part of their economic activities,\nespecially motorcycle taxi and ride-hailing drivers.<\/p>\n
Unlike goods transport, which mostly uses diesel, motorcycle taxi and\nride-hailing drivers are more vulnerable to being affected if they have\nto bear higher fuel costs. The increase in costs can ultimately be\npassed on to consumers through travel fares, delivery charges, and even\nfood prices.<\/p>\n
\u201cThe greatest risk is not in goods transport, which mostly uses\ndiesel, but in motorcycle taxis and ride-hailing services, which can\npass on cost increases to fares, delivery charges, and food prices,\u201d\nYusuf concluded.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economist-pertalite-restrictions-could-burden-households-1787032248", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }