UM Surabaya Legal Expert Describes 5 Reasons Why the Fuel Price Increase Is Incorrect

• 05 Sep
• 2022

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UM Surabaya Legal Expert Describes 5 Reasons Why the Fuel Price Increase Is Incorrect

• Article
• By Uswah Sahal
• Law
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Pertalite and Solar subsidized fuel prices officially increased on Saturday (3/9/2022) yesterday. The announcement of this increase was made by the government through a press conference held by President Joko Widodo or Jokowi and a number of his ministers via the Presidential Secretariat's YouTube channel.

President Jokowi stated that the fuel subsidy and compensation budget for 2022 had increased threefold from IDR 152.5 trillion to IDR 502.4 trillion and that it would continue to increase. Moreover, more than 70 percent of the subsidy is actually enjoyed by groups of people who can afford it, namely owners of private cars.

Satria Unggul Wicaksana, a lecturer and legal expert at UM Surabaya, emphasized that state money should be prioritized to provide subsidies to underprivileged people and currently the government must make decisions in difficult situations.

In a written statement, Satria said that the increase in fuel prices was inappropriate for various reasons.

First, the government should seriously consider this policy of withdrawing subsidies, because there will be a large increase in prices for several basic needs in society, including affecting the political-economic situation that occurs, because of the constitutional mandate of Article 33 (3) of the 1945 Constitution, the state is asked to regulate aspects of earth, water, minerals for the welfare of the people, including in this connection with regard to fuel.

"Moreover, economic conditions are recovering after the Covid-19 pandemic, considerations of economic stability must be the main consideration," said Satria Monday (5/9/22)

Second, the reason the subsidy is not on target because it is given to wealthy people with a per-capita income of more than Rp. 450,000 per month is also not appropriate, because it must be supported by transparent and accountable data, and the classification of affluent people with an income of 500 thousand is considered right if called capable.

Third, the transfer of subsidies to social assistance to poor people of 150 thousand per month and income in pre-employment is also not a solution, the government must make in-depth studies with ongoing policy considerations to address new poverty problems after social assistance is provided.

Fourth, the government must be committed to green economic growth. This means that if fuel subsidies are revoked/transferred, they should be accompanied by restrictions on the production/import of Low Coast Green Cars (LCGC) and over-vehicles which are actually a burden for the state, incentives for electric vehicles must be an option, so that apologists that fuel subsidies are not on target do not occur.

Fifth, if subsidies are diverted to the construction of the National Capital City (IKN), of course this will be inappropriate and become a political ambition that sacrifices the basic rights of Indonesian citizens.

"The government should not force efforts to build the IKN in the midst of an economic crisis, let alone divert fuel subsidies and various tax levies that actually make the burden on citizens heavier," said Satria.