GOVT SUBSIDY TO RISE RP3 TRILLION IF DOMESTIC FUEL PRICES REDUCED

Jakarta, Nov 4 (ANTARA) - The governemnt's fuel oil subsidy will increase by Rp3 trillion if the oil's domestic retail price is reduced by Rp500 or Rp800 per liter, an Energy and Mineral Resources Ministry official said.
The projected increase in the amount of the fuel oil subsidy will be discussed in a cabinet meeting soon, Evita Legowo, the ministry's director general of oil and gas affairs, said here Tuesday.
"We have calculated that if the subsidized fuel oil prices were reduced by Rp500 or Rp800 per liter, the amount of government fuel oil subsidy this year will rise by about Rp3 trillion," Legowo said.
She said the government was continuing to study the possibility of cutting the subsidized fuel prices following the dowward tendency in the world crude price.
Meanwhile, Energy and Mineral Resources Minister Purnomo Yusgiantoro said recently that based on the amount of subsidy allocation, it was impossible to lower the subsidized fuel prices again.
He said as of October this year the realization of fuel oil subsidy had reached Rp130 trillion or in exess of the ceiling amount of Rp126 trillion set in amended state budget.
But he added that the government would study the tendency of fuel prices further decrease before deciding to lower the subsidized fuel prices.
In addition to subsidy, the government's other consideration was to reduce the subsidized fuel prices if the non-subsidized fuel prices were already under the subsidized prices.