Official wants subsidy axed, alternative energy promoted
Official wants subsidy axed, alternative energy promoted
The Jakarta Post, Jakarta
To support the government's intention to promote the use of
alternative fuels, the subsidy for petroleum-based fuel should be
eliminated, a government official said on Tuesday.
Ministry of Energy and Mineral Resources' Director for Oil and
Gas Processing and Marketing Erie Soedarmo said that one of the
goals of the national energy policy was to bring the price of
energy, especially fossil fuel, to market levels by 2010.
"But the policy also maintains the subsidy for less-affluent
people," he told an international conference on Indonesia's
automotive industry and global environmental challenges.
Erie believes that cutting the fuel subsidy would help
accelerate energy diversification, which was also one of the
targets in the national energy policy.
In his paper, titled National Energy Policy and Regulation on
Downstream Oil and Gas Sector, he mentions that the policy also
includes market restructuring for energy supply.
At present, the power and industry sectors buy petroleum-based
fuel at market prices, while the service, transportation and
household sectors purchase it at subsidized prices.
According to the policy, 15 years from now, households will be
the only remaining sector purchasing fuel at government-regulated
prices, while others will pay market prices.
He said that if petroleum-based fuel was sold at market
prices, the private sector would soon look for alternatives.
In the search for the most suitable alternative fuel, Erie
said that businesses and people were encouraged to use all kinds
of energy resources, such as natural gas, coal, geothermal and
other renewable resources.
However, he suggested that in the short term, compressed
natural gas should replace petroleum-based fuel for
transportation.
He said that to encourage people to shift to gas, the central
government and provincial administrations needed to issue
regulations.
Erie said that other provinces should follow Jakarta, which
had issued a city bylaw requiring public transportation and
administration vehicles to use compressed natural gas in an
effort to reduce emissions in the capital.
Early this year, the Jakarta administration issued City Bylaw
No.2/2005 on air pollution control, which comes into effect next
year.
"There should be a rule obligating everybody to look for other
fuel resources," he said.
Meanwhile, Indonesian Automotive Industry Association chairman
Bambang Trisulo said the government should announce a plan on
switching to alternative energy immediately.
"Whether bio-diesel or gas, it should be officially
announced," he told The Jakarta Post.
On Monday, State Minister of Research and Technology
Kusmayanto Kadiman told the same conference that the government
would formulate a regulation to produce bio-fuel refined from
crude palm oil. (006)