Asia-Pacific

Indonesia to reduce energy subsidy for rich people

(Xinhua)
Updated: 2010-11-23 20:30

JAKARTA - The Indonesian government is to limit energy subsidy for rich people in January first next year as an effort to decrease burden of energy subsidy in the state budget, a minister said here Tuesday.

Related readings:  Cash subsidy replaces free ride  US move on clean energy ironic  Shandong introduces e-bike subsidy  China to subsidize solar power projects

Huge energy subsidies at the state budget has been criticized as one of the burden for Indonesia to jump to investment grade.

Coordinating Minister for Economy Hatta Rajasa quoted local media as saying that the government would ban vehicles produced after 2005 to consume subsidized-premium.

The new regulation "must be implemented," said Rajasa.

"The result of study (on the benefit of the regulation) is very convincing to us," he said.

Those having vehicles produced after 2005 was considered as high income group.

Indonesia plans to delete huge oil subsidy in the next five years and would gradually start the reduction next year, and would shift the funds to develop infrastructure, Finance Minister Agus Martowadojo said on November 10.

Indonesian President Susilo Bambang Yudhoyono said that the government would reduce dependency on fossil fuel and rely more on mixed-energy, including renewable energy, geothermal energy and others.