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Semarang, 09 September 2022 – The Student Executive Board (BEM) of the Faculty of Economics and Business (FEB) diponegoro University (Undip) held a ‘Kuy!’ Discussion event. This discussion about the increase in fuel prices seeks validation by rationalizing the increase in fuel in reality. This event was held at DOME Feb Undip guided by Prof. Dr. FX. Sugiyanto, M.S., as the speaker. The discussion was moderated by Gusti Ibrahim, Coordinator for Movement and Social Dynamics (PDS) bem FEB Undip.

The speaker, who is also a Professor of Economics Undip, reported that the increase in fuel prices was mainly due to inflation which made the state budget also change. One of the largest government funds turned out not to come from the salaries of employees, but from the determination of the budget for the pensions of its employees. The pension fund provided by the government is around RP2500 trillion every year, so in this case the pension fund is replaced with an insurance fund in old age.

In his explanation, the speaker said that if fuel is not increased, there are several things that happen. The first is unfair, because the one who enjoys the most subsidies is precisely the group that should not need subsidies for their fuel needs. The second is that the government’s count, subsidies, and compensation will reach IDR 653 trillion (assuming the needs do not decrease). Third, international oil prices will remain high even though they are currently declining slightly. Fourth, the state budget deficit will further swell above 3% of GDP, which is not only not in accordance with the law, but can threaten fiscal sustainability. Finally, there is no guarantee that inflation will decrease even if fuel prices are not increased and sixth, it will threaten other subsidies, for example on health, pensions, and so on.

Thus, the government and Pertamina need to be more transparent in calculating economic prices. The government needs to better explain to the public how to give and the amount of giving and to whoever is given subsidies, then it should always improve the data on subsidy recipients and the subsidy system, and implement fuel-efficient behaviors by the community and entrepreneurs should not take an opportunity. (MF)