Indonesia Sets 2015 Energy Subsidies Lower Than This Year

Indonesia's government is set to spend 1.6 percent less on energy subsidies next year, parliament's budgetary committee said on Monday, providing much needed fiscal space for president-elect Joko Widodo to fund his reform programmes.

The finance ministry and budgetary committee agreed on energy subsidies of 344.7 trillion rupiah ($28.8 billion) in 2015, down from 350.3 trillion rupiah this year.

The government had initially proposed a higher figure for 2015 of 363.5 trillion rupiah ($30.3 billion). The budget for energy subsidies usually shows an upward trend.

Parliament will vote on the energy subsidy deal, along with the rest of the 2015 budget, later this week.

President-elect Widodo, who takes office on Oct. 20, wants to fast-track a cut in fuel subsidies to free up funds for infrastructure, agriculture, health and education.

Energy subsidies this year cost the Indonesian government around $30 billion, or almost 20 percent of the budget.

Under Indonesian law, the outgoing administration proposed the 2015 budget for the incoming administration. President-elect Widodo can propose budget revisions as early as next year.

(1 US dollar = 11,972 rupiah)

(Reporting by Adriana Nina Kusuma; Writing by Gayatri Suroyo; Editing by Randy Fabi and Gareth Jones)