House decides to OK extra fuel subsidy allocation<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The House of Representatives endorsed a revision to the 2004
\nstate budget law on Tuesday despite the fierce resistance of
\nlawmakers from the Reform faction, who opposed the huge fuel
\nsubsidy.<\/p>\n
Under the revised law, the fuel subsidy is set at Rp 59.2
\ntrillion (US$6.43 billion), plus Rp 3.6 trillion in extra funds
\nshould the next government decline to raise fuel prices latter
\nthis year as recommended by the House.<\/p>\n
In total, the state budget allocates some Rp 63 trillion to
\ncover the fuel subsidy for 2004 amid soaring oil prices, which
\nhave forced the government to increase the average oil price
\nassumption in the budget to $36 per barrel from $22 per barrel in
\nthe original budget. Oil prices have now surged to over $50 per
\nbarrel.<\/p>\n
The massive fuel subsidy allocation -- almost three times the
\ntotal foreign loans the government has borrowed during the year,
\nwhich stand at Rp 21.7 trillion -- upset some legislators,
\nnotably from the Reform faction.<\/p>\n
\"An increase of more than 300 percent in the fuel subsidy does
\nnot make any sense,\" Nurdiati Akma, the faction's spokeswoman,
\nsaid while reading a statement from the faction.<\/p>\n
Not only has the subsidy burdened the already cash-scrapped
\nbudget, but it has also been the source of injustice among the
\npublic, with the subsidy being largely enjoyed by car owners, not
\nthe poor, she said.<\/p>\n
In addition, the current fuel policy encourages the smuggling
\nof fuel, Nurdiati said. \"Those who benefit from a fuel policy
\nlike this are those who smuggle the subsidized fuel products to
\noverseas.\"<\/p>\n
\"Taking all of this into account, the Reform faction expresses
\nits objection to the plan, and therefore rejects the revision to
\nthe 2004 state budget bill,\" she said to applause from
\nsupporters.<\/p>\n
A.M. Fatwa, who presided over the meeting, called for a brief
\nrecess after Nurdiati's speech to allow for lobbying.<\/p>\n
After some 15 minutes of lobbying, legislators from the Reform
\nfaction agreed to the passage of the bill into law, only
\nsubmitting a note of objection.<\/p>\n
The next government will be sworn in on Oct. 5, with the new
\nHouse members to be sworn in on Oct. 20. Resolving the fuel
\nsubsidy issue will be one of the most difficult tasks faced by
\nSusilo Bambang Yudhoyono, who is likely to become the country's
\nnext president, as raising fuel prices would be a politically
\nsensitive measure, while maintaining fuel prices at a time of
\nsurging oil prices could lead to fiscal disaster. The fact that
\nSusilo's political party, the Democratic Party, holds a small
\nnumber of seats in the House will likely make this job even
\ntougher.<\/p>\n
Meanwhile, the remaining eight factions at the meeting,
\nalthough most expressed some objections to the massive fuel
\nsubsidy, approved the bill.<\/p>",
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