Indonesia’s President-elect, Joko “Jokowi “ Widodo, is planning to hike the cost of subsidized gasoline and diesel by around 50% within two weeks of assuming office, a move which could help the Indonesian government save around $13 billion in 2015, Reuters reported today, citing an adviser to Widodo.
Widodo has been under mounting pressure to cut the nation’s budget deficit, despite the fact that he does not assume the role of the President of Southeast Asia’s largest country until Monday.
Reuters reports the adviser said that Widodo is looking to hike the cost of both gasoline and diesel by 3,000 rupiah ($0.25) per liter by November.
“The plan is Nov. 1 … but it’s safe to say they are likely to do it within the first two weeks of taking office,” the adviser told Reuters, who requested anonymity due to the fact that he wasn’t authorized to speak to the media.
The adviser added that Widodo could still decide to “change his mind” on the fuel price hike at the last minute, according to Reuters.
Widodo plans to provide the poorest families with 300,000 rupiah per quarter through the first quarter of 2016, in an effort to offset the higher cost of fuel, and that Widodo will weigh hiking fuel prices again during the fourth quarter of 2015, the adviser told Reuters.
The Indonesian government is expecting to save around 156 trillion rupiah ($12.76 billion) next year in fuel subsidy costs, the adviser told Reuters.
The money the government saves would be used to boost spending on infrastructure, agriculture, education, and health projects, Reuters reported, citing several advisers.
Source: Reuters
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