Rise in Fuel Prices Will Reduce Smuggling

Jakarta (Antara) - An increase in the prices will discourage smuggling of subsidized oil fuels from the country, Finance Minister Chatib Basri said. The price difference on the domestic and international markets will be smaller, Chatib said. "If the government did not raise the prices, the price difference will be wider and would encourage smuggling," he said here on Tuesday. The majority votes at the House of Representatives gave a nod in a plenary session on Monday night to government's plan to raise the prices of subsidized oil fuels. The House of Representatives in a plenary session approved revisions of the state budget raising energy subsidy to Rp199 trillion from Rp193 trillion in the original 2013 state budget. The increase would be higher without raising the prices of subsidized oil fuel, Chatib said. Without raising the prices of subsidized oil fuels, the energy subsidy would soar to Rp297 trillion. He said subsidized oil fuel requirement would increase from 48 million kiloliters to 53 million kiloliters resulting in an increase in oil fuel subsidy without raising the prices. He said the increase in the prices of subsidized oil fuels will cut consumption of subsidized oil fuels as the price difference between subsidized and non subsidized oil fuels would be smaller. Smugglers also would not risk committing the crime with gain smaller as a result of the price hike on the domestic market, he added. (*)