The government will set a new price for Premium and diesel on Jan. 5. The pricing policy will be used to fund energy security.
The energy security fund aims to ensure the availability of energy (including renewable energy) mentioned in Government Regulation (PP) No. 79/ 2014 on national energy policy based on Law No. 30/2007 on energy.
Article 27 of the regulation states that the government should strengthen the fund to ensure the availability of energy, the distribution of energy infrastructure, equitable community access to energy, the development of a national energy industry and the achievement of energy supply and energy utilization.
A drop in fuel prices is the right time to implement these regulations. Energy and Mineral Resources Minister Sudirman Said said the fund would be used to encourage the exploration of oil reserves and to build infrastructure and establish a strategic reserve of sustainable energy.
Indonesian fuel consumption will continue to rise each year. By simple calculations, it was found that in one year the government will receive around Rp 15 billion from the fund and over the next five years it will get Rp 76 billion.
The fund could be used to build a power plant (PLTU Batang, Central Java), nine hydropower dams, 526 sites for the newly opened Kupang solar power plant, six more toll roads and 29 oil exploration projects in eastern Indonesia.
This way is the easiest method to fund investment in the energy sector. With lower fuel prices, levies are not too burdensome as fuel prices remain low. The problem is when the world oil price increases. If that happens, will energy security funds still be levied on and charged to the public?
Nevertheless, the government will be tested by the community with this fund. There may be corruption or misuse of the fund. A very large amount will attract the attention of people. Society will refuse to pay if they know the government takes their money in corruption.
In spite of everything, this legislation has been enacted along with a government regulation. We do not want to see the government change its mind by issuing a regulation in the morning and then immediately revoking it in the afternoon.
The government should be confident and explain to the public the usefulness of the fund.
When the fund is applied, the dream of energy security will move closer to reality. However, the fund is still small compared to the scale of investment needed to achieve energy security. The target of 35,000 megawatts of electricity requires billion of dollars in investment.