Indonesia Considering Compulsory Fuel Conservation Measures
26 April 2006
Jakarta Post. The Indonesian government is considering the enactment of new legislation instituting compulsory fuel-savings measures because the voluntary energy conservation program it encouraged last year has proven ineffective.
The government will study legislation on energy conservation in other countries, including Japan, to ensure that the new Indonesian legislation is more effective, according to State Minister for National Development Planning Paskah Suzetta.
“Voluntary fuel conservation campaigns have not been effective. They need to be made compulsory,” said Paskah after meeting Vice President Jusuf Kalla.
He reiterated that the government would renew its energy-conservation campaign this year through such things as restricting the use of private cars with engine capacities of above 1,300 cc.
“The government hopes to reduce subsidized fuel consumption by between 30 percent and 35 percent this year through an intensive fuel-saving campaign,” said Paskah, without going into the details.
The transportation sector consumes around 48% of the subsidized petroleum-based fuels.
While Indonesia is still a member of the Organization of Petroleum Exporting Countries (OPEC), it became a slight net importer of oil in 2004, and its oil production has continued to decline. (Earlier post.)
With global oil prices now hovering at above US$70 per barrel, the government is concerned that the allocated subsidy for oil-based fuels will be exceeded again this year, forcing the government to cut subsidy spending by raising fuel prices.
After the government raised prices last year in response to the spike in oil prices, the Indonesian economy—Southeast Asia’s largest—slowed its rapid growth.
Separately, the Transport Ministry said that it will provide Rp 40 billion (US$4.4 million) this year to provide free converters to public transportation vehicles to allow them to switch from gasoline to compressed natural gas (CNG).
State-owned Pertamina began developing jatropha biodiesel last fall and is beginning test marketing of a diesel-palm oil blend.
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