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(Jakarta Post) Golkar Lawmakers Regrets Reallocation Fuel Subsidy
Golkar faction at the House of Representatives has said it regrets the decision of the Joko “Jokowi” Widodo and Jusuf Kalla administration to increase the price of subsidized fuel, because it comes at a time when global oil prices are in decline.
“The Rp 2,000 (16 US cents)-increase in the price of subsidized fuel that President Jokowi has announced means that he has broken his own promises made during the 2014 presidential election campaign. He is not sensitive to the plight of the people,” Golkar Party faction chairman Ade Komaruddin told journalists after the opening of the party’s national leaders’ meeting in Yogyakarta on Tuesday.
Ade argued that it was difficult to understand the government’s decision to increase fuel prices by economic logic, because the global oil price was currently $73.50 per barrel, 30 percent less than the Indonesian crude price (ICP) assumption in the 2015 State Budget (APBN).
“It is time for the government to change the current paradigm in determining oil prices by no longer implementing the Mid Oil Platts Singapore (MOPS) formulation, which is heavily influenced by the price games of the oil and gas mafia,” he said.
According to Golkar, the government could have set its own fuel-price calculation formula that was independent, transparent, accountable and free from the influence of the oil and gas industry.
Ade said President Jokowi’s strategy of issuing “magic cards” – the Indonesia Health Card (KIS), Indonesia Smart Card (KIP) and Prosperous Family Card (KKS) -- to compensate the poor for the increase in fuel prices was also improper, as the issuance of the cards violated legal principles regarding budgeting.
Satya Widya Yudha, a member of House Commission VII overseeing energy and Golkar member, said that up to now, there had been no transparency from either the government or state-owned oil and gas company Pertamina in deciding fuel prices.
“All this time, the fuel basis price has been determined via MOPS plus alfa [distribution costs]. Why do we use MOPS? It’s because most of our oil products are imported from Singapore,” he said.
Meanwhile, Golkar faction deputy head Bambang Soesatyo said that he wanted to hear explanations about the existence of an oil and gas mafia found by the Oil and Gas Management Reformation Team led by economist Faisal Basri.