Indonesia mulls removing gasoline subsidy

The Indonesian government is making a plan to reduce fuel subsidy that costs this year's budget 61.83 trillion rupiah (about 6.8 billion US dollars), local press said Monday.

According to the plan, the government will remove subsidy on gasoline product with octane number 88 that currently sells at only 4,500 rupiah (50 U.S. cents) per liter.

The government will put this fuel product under market pricing along with other gasoline products of higher octane number, reported leading economic daily Bisnis Indonesia.

The plan, expected to take effect in 2009, is being cooked by the Oil and Gas Upstream Regulatory Agency (BPH Migas).

"BPH Migas is now assessing a plan to put gasoline under market pricing to reduce fuel subsidy," the agency's head Tubagus Haryono was quoted as saying.

The subsidy removal, however, doesn't cover kerosene and low quality diesel fuel.

Source: Xinhua