VIVAnews - The House of Representatives (DPR) viewed that the government would breach Law No. 22 /2001 on Oil & Gas if it applies the G20 agreement which removes fossil fuel subsidies.
The law basically states that the price of fossil fuels cannot be surrendered to market mechanism.
“The consignment of the price to the market mechanism has been cancelled by the Constitutional Court (MK),” Finance Commission member Dradjad H Wibowo at the DPR building on Monday, September 28.
”So, according to the law, the subsidies could not be abolished as mentioned by the G20 agreement. Indonesian government shouldn’t have been included in the communiqué,” Wibowo said.
At the G20 Summit in Pittsburgh, some of the important points in the agreement include making G20 the main international economic cooperation forum replacing G8, establishing the Financial Stability Board by involving developing countries and resuming IMF and World Bank reforms including the enhancement of the position of developing countries in the IMF and World Bank.
The summit also agrees to control the subsidy of fossil fuels due to its inefficiency and negative impacts towards climate change and replace it with other subsidy which is more focused on low-class society.
According to Wibowo, the removal of fuel subsidy would cause a lot of members of the society in Indonesia, starting from the farmers to high-class entrepreneurs, to be diminished.
“Agreements on economic openness are indeed inevitable. But not all of them should be passed on to the market mechanism,” he said.
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Translated by: Nataya Ermanti
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