Government to restrict sales of subsidized fuel from August 17, says Luhut – Regulations

The government wants to limit purchases of subsidized fuel from August 17, making it available only to eligible customers. The move is intended to reduce the burden on this year’s state budget.

Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said the government is moving towards more targeted subsidies, meaning subsidized fuel will soon be available only to eligible beneficiaries.

“We will reduce the number of people who are not eligible for subsidies (from using them). We are making calculations,” Luhut said on his private Instagram account on Tuesday, saying state oil and gas company Pertamina was preparing regulations needed to make the change.

The government is considering limiting purchases of subsidized fuel from 2022 as fuel subsidies have exceeded budget allocations due to a sharp rise in global oil prices and a weakening of the rupee against the US dollar following the outbreak of the war in Ukraine.

Initially, the plan was for vehicle owners to be required to register using a smartphone app so that Pertamina could ensure only eligible customers would buy the subsidized fuel.

The scheme would apply to Pertalite and Solar petrol, Pertamina’s subsidised RON-90 petrol and diesel with a cetane number (CN) of 48.

However, the plan has been delayed as the government decided to raise the prices of subsidized fuel in 2022, which have not changed for years.

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