Dual Fuel Pricing System to Trigger Chaos

Pekanbaru, Riau (Antara) - The government's plan to impose a dual pricing system for subsidized fuels will create chaos among the people due to price disparity, Ediyanus Herman Halim, economist from State University of Riau (UNRI) said here on Thursday. "The good solution to save state budget expenditures in this country is removing fuel subsidy," he said. According to Adrianus, the previous regulation on the limitation of subsidized fuel consumption has not worked. It restricted industries vehicles to use subsidized fuel. "The regulation did not work because there was no law enforcement and control on it," he said. Ediyanus said the allocation of state budget for subsidized fuel could be diverted to developing infrastructures. In 2011, the government spent Rp137 trillion for subsidized fuel. One year later it increased to Rp219 trillion. "We sacrificed tens of trillions for rich people. It could be better if we use the subsidy for other need like building the infrastructure," he said. The government has planned to raise subsidized fuel price but separated it in a dual pricing system where private cars would see the price increase of premium gasoline from Rp4,500 to Rp6,500 or Rp7,000 (about 30 percent increase) per liter while for motorcycle and public transportation vehicles will still enjoy the price of Rp4,500 per liter. The government could save the state budget expenditure up to Rp21 trillion from the imposition of the dual fuel pricing system. (*)