Tuesday, 10 May 2011 12:14
Jakarta - President Benigno C. Aquino III’s fuel subsidy program Pantawid Pasada Program (PPP) is being studied by the Republic of Indonesia as a possible substitute for their state-funded subsidy on fuel prices.
In a press briefing at the Jakarta Convention Center here on Saturday, Energy Secretary Jose Rene Almendras said that the Indonesian government is considering implementing a similar subsidy program that will be granted to specific sectors of the society aimed at helping their government maximize the funds allocated every year.
“They are actually looking at our Pantawid Pasada system, instead of subsidizing everything they will now move into direct subsidies to specific sector, mainly the transport system”, Almendras said.
“When their money runs out… they are going to shift to specific targeted solutions," he added.
Indonesia spends ten billion US dollars a year to subsidize the daily fuel requirements of its people.
Due to the increasing demand, Almendras said the Indonesian government expressed fears of a possible shortage of funds intended for the fuel assistance being extended to the people.
“Indonesia is an oil-producing country…but they do not have enough for the present demand. The President of Indonesia is worried about how they are going to handle it when and if they ran out of the money they set aside”, Almendras said.
Presidential Communications Development and Strategic Planning Office Secretary Ramon Carandang, for his part, said that Indonesia’s oil reserves have been depleting resulting to difficulties for their government to sustain the subsidy. The reduction in oil reserves has also affected their membership to the Organization of the Petroleum Exporting Countries (OPEC).
He added that in recent years, the Indonesian government has been reducing financial support to the rising prices and demand of oil.
“They are moving away from almost a universal subsidy on fuel towards a more targeted subsidy like we have in the Philippines and this is an economy that is larger than ours in absolute terms,” Carandang noted. (PNA)
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