In the name of God, please stop buying subsidized fuel, lawmaker says

A member of the House of Representatives (DPR) is calling for a divine solution to Indonesia’s looming subsidized fuel crisis.

Willy Midel Yoseph, who sits in DPR’s Commission VII that oversees matters related to energy affairs, yesterday suggested that the Indonesian Ulema Council (MUI) — the highest clerical body in the nation — issue a fatwa (religious edict) to make sinners out of those who buy the subsidized Pertalite and Solar fuel variants when they’re not entitled to.

“[The government] tried to supervise [where the subsidy goes] but so far it has been a failure. So let’s try again with the extraordinary measure of issuing a fatwa,” Willy said in a commission meeting yesterday.

MUI’s fatwa is not legally binding but it carries huge social weight in Muslim-majority Indonesia. For example, the Indonesian government recently entertained the idea of medical marijuana research after Vice President Ma’ruf Amin merely suggested that MUI issues a fatwa supporting it.

Subsidy for the 90-octane rated Pertalite ostensibly targets low cost vehicles and motorcycles. However, in practice, the fuel has been regularly consumed by higher-end vehicles as well, as enforcement of subsidy regulations has been woefully lacking. 

Subsidy for the diesel fuel Solar targets mostly vehicles in the industrial sector, such as trucks.

President Joko Widodo earlier this week said the country is between a rock and a hard place regarding fuel subsidies. While the government says there is a pressing need to remove or reduce subsidies, Jokowi said he is still weighing the pros and cons of such measures on the overall economy.

Amid a global energy tumult, the Indonesian government has earmarked IDR502 trillion (US$33.7 billion) for energy subsidies, up from the IDR170 trillion (US$11.4 billion) initially set in this year’s state budget.

Pertalite currently costs IDR7,650 (US$0.51) per liter, but Jokowi previously said that its actual cost is IDR17,100 (US$1.15) per liter.

An economist predicts that 100,000 Indonesians may plunge into poverty if Pertalite’s retail price is raised to IDR10,000 (US$0.67) per liter.