The government says it will propose spending Rp 12 trillion (about $1.2 billion) to finance an extra four million kiloliters of subsidized fuel for the 2012 state budget, after Jakarta reported it would use up its quota this year by as early as next week.
“It’s approximately Rp 12 trillion, considering a million kiloliters costs Rp 3 trillion,” Head of the Finance Ministry’s Fiscal Policy Board (BKF) Bambang Brodjonegoro said on Thursday in Jakarta.
Bambang added that the additional spending meant the deficit would expand from 2.23 percent of the gross domestic product to 2.3 percent.
“What matters is the deficit won’t exceed 2.3 percent, even in the worst [case] scenario,” Bambang said.
State oil and gas firm Pertamina announced on Tuesday that five provinces in total would burn through their annual quota of subsidized fuel before the end of the year.
The four other provinces — West Java, West Kalimantan, Riau Islands and South Kalimantan — are predicted to use up their quotas by October or early November.
Overall, Pertamina said it had channeled a total of 29.32 million kiloliters of subsidized fuel as of Aug. 30 — 18.44 million kiloliters of Premium (subsidized gasoline), 10.06 million kiloliters of diesel and 700,000 kiloliters of kerosene.
The total subsidized fuel quota for this year was earlier set at 40 million kiloliters.
In response to the report, the government, through the Energy and Mineral Resources Ministry, has announced it will propose additional four million kiloliters of subsidized fuel for this year, increasing the quota to 44 million kiloliters.
On Thursday, the ministry’s director general for oil and gas, Evita Legowo, said she was optimistic the House would approve the proposal.
The government had planned another solution in case the proposal didn’t pass. By diverting some funds earlier allotted for subsidized kerosene to subsidized gasoline and diesel, adding kerosene consumption was thus far lower than the projected figure, unlike the burgeoning gasoline and diesel consumptions.
“We might need to adjust the volume of kerosene then,” Evita said.