JAKARTA: Government is currently reviewing the plan to change the distribution form of fuel subsidy from price subsidy to direct subsidy so it will be right on target.All this time, distribution of fuel subsidy only focuses on prices as its influenced by two variables, i.e. oil price and volume that fluctuates. We are comparing its cost and benefit, Oil and Gas Director General Evita Herawati Legowo said.The subsidized fuel volume is believed to be relatively fixed or changes only a little bit if the direct subsidy proposal is approved.She reminds that the government and House Commission VII have agreed the volume of fuel subsidy next year between 38.4 million KL-41 million KL as long as the fuel use is controlled and regulated.ReforMiner Institutes Executive Director Pri Agung Rakhmanto said the production subsidy is not different with price subsidy that currently applied by government.Product or price subsidy will always create economic distortion since there is disparity with non-subsidized fuel, he added.Responding to direct subsidy implementation plan, he suggests the government to prepare the infrastructures needed for such plan such as integrated data collection system of people who live in poverty with social security system like health insurance, education, or basic necessities.Electricity subsidiesInstitute for Essential Service Reforms Executive Director Fabby Tumiwa stressed the need for more options related to the electricity subsidy arrangement so that its distribution will be right on target and those options needs to be conducted similar to fuel subsidy arrangement.Such options are needed to reduce the amount of electricity subsidy that continues to grow each year. We have discussed the options for fuel subsidy [arrangement] while there are no options for electricity.The electricity subsidy arrangement is very urgent to be done since the government doesnt dare to raise electricity tariff proportionally same as it doesnt dare to raise fuel price, which is then formulated several arrangement options. (14)(t06/msw)

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