Indonesia moots gas rationing in drive to save energy

Apr 28, 2006 02:00 AM

by Urip Hudiono and Dadan Wijaksana

Owners of fuel-guzzling vehicles may have to start thinking twice before hitting the gas, with plans to enforce fuel quotas and higher taxes on large-capacity engine cars in a nationwide energy-conservation drive.
The campaign may be the only option for the cash-strapped government to prevent fuel subsidies from straining the state budget, because it has said it will not raise fuel rates despite soaring oil prices.

State Minister for National Development Planning/Chairman of the National Development Planning Agency (Bappenas) Paskah Suzetta said the government must act now to secure the sustainability of the national economy in terms of energy, with world oil prices reaching $ 75 a barrel and the country's fuel consumption well above its production level.
"We need to implement a comprehensive national energy security strategy, which will include encouraging energy-conservation attitudes and a better transportation management system," Paskah said.

"Unfortunately, calling on the public to use energy efficiently has in the past proven to be ineffective. That's why we need to enforce it through regulations, complete with sanctions, which we will propose and discuss with the House of Representatives to be implemented as soon as possible."
Among the options under consideration is a "fuel purchasing quota" for certain cars.
"Owners of cars with engine capacities of 2,000 cc and above, for example, will only be allowed to purchase a certain amount of fuel at one gas station," he said, adding a mechanism to prevent car owners from visiting several different gas stations was being devised.

Paskah also proposed applying progressive tax schemes on cars according to their engine capacities and year of production. Existing taxes on cars with engine capacities of 2,000 cc and above, Paskah said, would be raised between 150 and 500 %, with 4,000 and 5,000 cc fuel guzzlers applied the ceiling rate.
"Taxes on cars with engine capacities 1,300 cc and below would not be raised, however, and we are still exercising the rates according to the production year, to prevent burdening car owners from the lower bracket," he said.

Paskah explained private cars were the focus of the drive, to be discussed at a Cabinet meeting soon, because they were the largest fuel user and accounted for about 30 % of Indonesia's total annual fuel consumption.
Economist Faisal Basri doubted an energy-conservation drive would be successful if government officials continued their wasteful practices.
"It would be useless if government officials themselves don't show austerity in using energy, with lights, air conditioning and water running all the time in government buildings," he said.

The University of Indonesia scholar also warned the government to be circumspect in its plans to limit oil imports this year, factoring in the possible impact on the public and the productivity of local industries.
President Susilo Bambang Yudhoyono reiterated the government would notraise energy prices this year, despite concerns soaring oil prices may jeopardize fiscal stability.

"Our economy is still struggling, so no matter what, the government is committed not to hike fuel prices and power rates. Let's just let the economy recover first so that the income and purchasing power of the people can improve as well," he said in Riyadh during his state visit to Saudi Arabia.
The government twice hiked fuel prices and revised the budget last year, when oil prices also experienced a surge to some $ 70 a barrel, causing the economy to slow down as businesses and households were badly affected due to rising cost.

Source: The Jakarta Post
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