Dilemma in Subsidized Diesel Fuel Restriction

By Editorial Team 23/09/2019
Summary

Government measures in reducing energy subsidies by restricting the use of certain types of diesel fuel are facing a dilemma. On the one hand, consumption restrictions are essential to reduce the swollen distribution, which might exceed quotas. On the other hand, the limitation might disrupt the performance of several productive sectors since fuel prices are the most important component in their operations.

In its circular letter, Regulatory Agency for Upstream Oil and Gas (BPH Migas) prohibits the use of diesel fuel for vehicles with more than six wheels transporting plantation, forestry, and mining products. The prohibition also applies to civil, military, and police official cars and large trucks. Diesel fuel used for goods transport is also restricted to only 30-60 liters per day. The restriction invoked complaints from several business sectors, such as transportation, logistics, and retail distributors.

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