REPUBLIKA.CO.ID, JAKARTA -- President Joko 'Jokowi' Widodo has raised the price of subsidized gasoline to Rp 8,500 from Rp 6,500 a liter and the price of subsidized diesel oil to Rp 7,500 from Rp 5,500 a liter. Parliament considers the move as violation to law.
A member of House of Representatives Lucky Hakim said on his Twitter account @sayaluckyhakim that the President raised fuel price without parliament's permission. "It violates laws on state budget article 7," he said on Monday, November 17.
The article says government can raise fuel price without parliament's permission if only the price of global oil increase up to 15 percent from state budget assumption. The assumption of oil price in the state budget is 105 USD per barrel. Meanwhile, the price of global oil decreases to 75 USD per barrel. Hakim said that the President had to read the 1945 Constitution Article 23.
"The point is every planning, revision and implementation of state budget should obtain permit from parliament," he said.
On Monday night, President Jokowi confirmed that the government has decided to divert fuel subsidy to productive sectors in order to increase budget allocations to them. "The decision to divert fuel subsidy to productive sectors is aimed at creating funds that are used more effectively for all of Indonesia," he said at a press conference.
President Jokowi stated that the government needed sizable amount of funds to finance the development of infrastructure and improve education and health services. These required funds were frequently unavailable because a considerable amount was spent on fuel subsidy, he noted. The fuel price hike will be effective across the country from Tuesday, November 18.
Furthermore, the government will compensate the poor for the fuel price hike by providing them with Prosperous Family Cards, Indonesia Health Cards, and Indonesia Smart Cards. "The move is aimed at maintaining the purchasing power of the people and encouraging them to carry out business undertakings in productive sectors," Jokowi explained. He added that the government thoroughly deliberated the pros and cons of the fuel price hike before coming to a decision.
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