Tuesday, November 4, 2014

Subsidized Fuel Price Increment

The raise of subsidized fuel price, which is premium and solar has become an old issue in Indonesia. Though the new president has been elected by Indonesian people, the regulation regarding energy still look the same. Some people think this obligation is irrational due to high poverty in Indonesia. Is this obligation made by government is not right? Here are two consideration about the decision made by government.

Subsidized fuel in Indonesia, as we know are non-renewable energy sources. The consumption of this limited sources must be studied so that the young generation could also enjoy during their life. In Indonesia, oil reserves has gradually decrease. This was proved by Indonesia resignation from OPEC in 2009. Moreover, based on Undang-Undang Pasal 33 that said "Earth, water and other natural resources that contain in it are controlled by the government and must be use for people prosperity." make Indonesia government have to give subsidized fuel to needy people. However, it does not hit the target which result in the increasing demand in fuel. Conserving the fuel become the government concern that make they have to make the recent decision about subsidized fuel.

Indonesia is very rich in its natural resources, especially energy resources. Energy sources such as natural gas and coal is spread across the country. Based on U.S Energy Information Administration, Indonesia have proved natural gas reserves around 108.4 tcf, which contribute 20.8% natural gas reserves to Asia and Oceania natural gas reserves and contribute 1.6% to world natural gas reserves. Number of professional is not little in Indonesia so it suppose to be easy to shift fuel to other alternative energy. However, due to the cheap price of the fuel, people tend to buy subsidized fuel rather than other alternative energy. This make the market for alternative energy become undeveloped. International companies then take advantages regarding this situation by signing contract for mining, producing and selling our resources to other country. This is really a great loss for our country.

Indonesian government have actually think about strategy to keep the implementation of the obligation working. During Soeharto Era, there are 7 kind of subsidized fuel for Indonesia people, one of them is kerosene. With the idea from Jusuf Kalla, Indonesia government shift kerosene to LPG. The government cooperate with Pertamina to increase the production of LPG for Indonesian people. The program was success even though the government have to owe Pertamina around 2,7 Trillion rupiah. Restriction of solar and premium for government employee, military, and industry has been implemented. The usage of natural gas has increased due to increment of Trans Jakarta bus driven by natural gas engine.

Despite many efforts from the government about fuel subsidized we need to keep in our mind that this decision are made for Indonesia people prosperity. This decision must be supported by not buying subsidized fuel for people who live on easy street. It is the needy people right to enjoy the subsidized fuel from Indonesian government. Conserving energy such as reducing excessive usage of electricity will really help the government to keep our oil reserves. Giving aspiration regarding conserving energy will also help the government to find solution about energy in Indonesia.

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