THIS HOUSE WOULD CUT SUBSIDY ON FUEL

Subsidies are government payments made to companies and households to achieve

certain goals which they can produce or consume a product in greater quantity or at a
cheaper
price. Economically,
the
purpose
of subsidies is to reduce prices
orincrease output (output).

Affirmative :
Socials aspect :

1. Besides the increase in world oil prices are very high, rising fuel prices also causedthe
government to see that fuel subsidies that have been given more enjoyed by
themiddle
and
upper income
groups. Injustice that can
be
seen from
the 20% topincome group people enjoy almost 48.44% of fuel subsidies. While 20%
of
the toptwo income groups enjoy
a 22.48% subsidy, 20% middle-income
communities enjoysubsidies 15.16%, and 20% of the income groups carry over to
enjoy the 8.77%subsidy. While 20% of the lowest income group just enjoys fuel
subsidies amounting to 5.15%. Besides the increase in fuel subsidies resulted in a
variety of programs forthe poor to not have been possible. And the greater
the subsidy, the greater injusticeis allowed to continue to do.
2. In order to overcome the impact of fuel price increases are perceived burden of the
poor, the government has established a policy to provide assistance that is cash
financial aids (BLT). Poverty reduction efforts to achieve social welfare is one ofthe
mandate of the 1945 Constitution which states are responsible for the poor
andabandoned
children.
Direct
Cash is never
given
the SBY-JK government is twice that in
the
year2005/2006 and 2008. BLT year 2005 consists of two stages of division. The first
phase in October-December 2005 in the amount of Rp300.000, 00 and the second
phase in January-March 2006
amounted
to Rp
300.000,00. This aid is aid grantedafter the government raised fuel prices in 2005. In
2005 the fuel price increaseoccurs twice, namely at the date of March 1, 2005 by
30%, and dated October 1, 2005 amounting to 128%. And distribution of direct cash
assistance to two timesthat of 2008 which was distributed in June to August 2008
amounting
to Rp
300.000,00 and in
September-December
2008 Rp 400,000.00. Direct cash assistance in 2008 was a relief after the government
raised fuel prices by returning27.8% on May 24, 2008.
3. Direct Cash Assistance is a government program created to prevent increased
poverty due to rising fuel prices. The presence of direct cash assistance program is
made possible from Act 6 of 1974 On Main Provisions of Social Welfare where the
government
is tasked to
formulate
policies to improve social welfare.

BLT program created by the government in tackling the impact of fuel price
increases are causing reactions pros and
cons of various walks
of
life. Parties prowith this government
policy view
that government must help
people who are unableto meet daily needs after the price hike. And there
are also those who see that theBLT program is an aid in the transition period which
aims to maintain stableeconomic and social conditions of society when the country
experienced
adeterioration
of economic
conditions. Others
argue that
the BLT program is anemergency response assistance. While the counter-party to
the program requested that the government did not launch aid, but delaying the
determination of fuel price increases.
cash financial aids (BLT) Program of the final state to be achieved by
theorganization / country is helping the poor in order to remain able to meet basic
needs, and to prevent decrease in level of welfare of the poor due
to economicdifficulties, and increase social responsibility together.
a. Helping the Poor Can Meet Needs to Keep essentially
Basic requirement is a requirement that holds a very important role for the
community to maintain its survival. Included in the basic needs are food,
clothing,shelter, education and health. Food is a basic human need and therefore the
most important part of individual rights. Food is also a major component
of the base to realize the quality of human resources.
Seeing as the importance of compliance with these basic needs especially food,then
the government is always trying to make policies that are aimed

Negative :
1. Due to government fuel subsidy burden
The Government has spent Rp 29.9 trillion to subsidize fuel oil (BBM) from January
to April 2011. This budget reached 30.4% of the budget ceiling of Rp 95.9 trillion this
year.
Deputy Finance Minister Anny Ratnawati explained, the total subsidy that has been
poured by the government by April 2011 reached Rp 46.4 trillion or 24.7% of the
budget target in 2011. Subsidies, he added, consisting of Rp 38.8 trillion in energy
subsidies, or 28.4% of the ceiling and non-energy subsidy of Rp 7.6 trillion or 15% of
the ceiling.
Previously, Herry Purnomo Directorate General of Budget Ministry of Finance
estimates that the fuel subsidy will exceed the budget target in 2011, in connection
with the cancellation of restrictions on subsidized fuel program in April. This resulted
in fuel subsidy quota of 38.5 million kiloliters set to swell to be 42 million kiloliters,
let alone the world price of oil has penetrated the U.S. $ 100 per barrel, while prices
in the state budget assumption of U.S. $ 80 per barrel. Furthermore, there are other
factors that would trigger such as swelling fuel subsidies, higher oil prices Indonesia
(ICP / Indonesia Crude Price) and the addition of subsidized fuel.
Fiscal Policy Office (BKF) Ministry of Finance revealed the increase in the deficit due
to rising fuel oil quota depends on the composition of the subsidy.
Head of Budget Policy Asolani BKF said the addition of the state budget deficit could
not immediately be determined how much, the article kind of diesel fuel
composition and the additional premium is not the same. Askolani said, if the quota
is raised directly, it will increase fuel subsidies and increase the deficit, with a note
assuming the other variables unchanged.
BKF head Bambang PS Brojonegoro explain each additional one million kiloliters of
subsidized fuel, it will add to the burden the state budget of Rp 1.7 trillion.
Meanwhile, PT. Pertamina (Persero) claimed to have lost four billion dollars ratur in
the first quarter of 2011. Losses from the sale of subsidized fuel. In percentage
terms, than the first quarter RKAP-2011 with the realization, Pertamina still lose up
to 152%. Djaelani further said, the realization of the first quarter of 2011, Pertamina
suffered a loss of Rp 400 billion. This is because the application of the subsidy
reimbursement is based on MOPS (Mean of Plats Singapore) last month led to the
recognition of revenue missmatch and cost.
MOPS by the government of Indonesia is used to determine the reference price of
fuel in the country, it is based on the condition of the absence of market prices so
that the necessary domestic market price of the nearest reference (border
price). Pertamina profit of Rp 800 billion from the sale of subsidized LPG 3 kg during
the first quarter of 2011. Therefore, the distribution of gas and fuel subsidies,
Pertamina still profit 400 billion.