Indonesia’s failure to get rid of costly petrol subsidies is standing in the way of energy security, said a high-ranking official in the energy ministry. Deputy minister Rudi Rubiandini said that the Republic’s renewal energy industries will not be able to compete with fossil fuels unless subsidies are reduced - a move which would result in an unpopular fuel price increase of more than 30 per cent.
He noted that the subsidies had been left off of the agenda for budget meetings taking place in the next week, and added that he was prepared to deal with any protests that resulted if prices were increased from its current level of Rp 4,500 to Rp 6,000 per litre.
If adopted, the new price would be less than half of fuel prices in nearby Thailand and Vietnam. Without the price increase, the subsidies will cost Indonesia an estimated Rp 274.74 trillion (about US$28.6 billion) in 2013.
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