Jakarta (ANTARA) - President Joko Widodo (Jokowi) believes the government can reduce subsidy from the State Budget (APBN) by around Rp60 trillion to Rp70 trillion by slashing Liquefied Petroleum Gas (LPG) imports and switching to dimethyl ether (DME).
"If we stop using LPG and move to DME, Indonesia can save up to Rp60 trillion to Rp70 trillion from our APBN," Jokowi stated during the groundbreaking for the project for downstreaming coal into DME in Muara Enim District, South Sumatra, Monday.
The project of coal gasification into DME in Muara Enim alone, which is managed by PT Bukit Asam Tbk, PT Pertamina, and Air Products & Chemical, could reduce the state budget subsidy by around Rp7 trillion, Jokowi remarked.
The president has encouraged the downstreaming and industrialization of raw materials from natural resources. Thus, companies will not export coal in raw material but will go through a downstream process to produce coal into semi-finished or finished products, which can be an added value and be utilized for domestic needs.
In order to meet the domestic demand, Indonesia will no longer rely on imports and can improve the current account balance, which is one of the fundamental pillars of the economy.
"This is what we continue to pursue apart from being able to improve our trade balance without importing stuffs, so we can improve our current account balance," Jokowi affirmed.
On the same occasion, Minister of Investment/Head of Investment Coordinating Board (BKPM) Bahlil Lahadalia remarked that the coal gasification project was Jokowi's mandate to him when he was inaugurated.
Apart from being able to reduce LPG imports and save subsidies in the state budget, Lahadalia stated that it would produce 12 to 13 thousand jobs during the construction period, 12 to 13 thousand jobs during downstream activities, and three thousand workforce and an additional three to four folds the workforce from contractors, sub-contractors, and others during production activities.
Cabinet Secretary Pramono Anung, Minister of State-Owned Enterprises Erick Thohir, Minister of Investment/Head of BKPM Bahlil Lahadalia, Minister of Energy and Mineral Resources Arifin Tasrif, Chairman of the Financial Services Authority (OJK) Board of Commissioners Wimboh Santoso, and related officials and the business sector players accompanied Jokowi during the groundbreaking.
