Extra energy subsidy not to widen budget deficit: Senior minister

Jakarta (ANTARA News) - The governments plan to raise budget allocations for energy subsidy will not widen the budget deficit, Coordinating Minister for Economic Affairs Darmin Nasution assured.

The extra budget allocations for energy subsidy are the consequences of global crude price hike, he stated here on Wednesday.

On one hand, the global crude price hike will automatically add to energy subsidy, while on the other hand, it will raise state revenues, he added.

"It will improve surplus rather than causing deficit. Thus, it will have a positive impact when it comes to fiscal issue," he noted.

Finance Minister Sri Mulyani Indrawati assured on Tuesday that budget allocations for energy subsidy in 2018 will be raised as a result of global crude price hike.

"We have calculated the amount of extra subsidy needed, along with the energy and mineral resources minister and the state enterprises minister," Sri Mulyani remarked.

The average global crude price hike has exceeded the government-set target of US$48 per barrel in the state budget, she explained.

Indrawati added that the increase in energy subsidy will cover extra subsidy for Pertaminas diesel oil, which is expected to increase from the current price of Rp500 per liter.

The energy subsidy also had to do with the adjusted price of coal sold to the electrical power plants of state electricity company PT Perusahaan Listrik Negara (PLN) under domestic market obligation (DMO), she revealed.

In this regard, the government has calculated the potential loss of tax receipts and non-tax state receipts from the coal mining industry, she elaborated.

The government has set the energy subsidy in the 2018 state budget at Rp94.53 trillion, comprising fuel subsidy worth Rp46.9 trillion and electricity subsidy worth Rp47.7 trillion.

Source: ANTARA News

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