JAKARTA – Chief Investment Minister Luhut Binsar Pandjaitan is calling for a sound policy to restrict the sales of fossil fuel vehicles and accelerate electrification in a lengthy Instagram post on Sunday.
“I received data from the automotive industry indicating that the average fuel consumption reaches 1,500 liters for a car and 305 liters for a motorcycle a year. We can imagine that most vehicles use subsidized fuel products, resulting in a ballooning fuel subsidy [in the state budget],” Luhut wrote.
“I’m asking the inter-ministerial technical team to formulate policies on par with or better than those of other countries who have already implemented restrictions on fossil fuel vehicles,” he added.
Luhut said restrictions on fossil fuel vehicles will accelerate the transition toward electric vehicles and help achieve the government’s climate ambitions.
“There is a bigger goal than reducing our dependence on subsidized fuel products, namely reducing carbon emission by 40 million tons by 2030 from this program alone,” he said.
“And eventually fuel subsidy in the State Budget can be reallocated to sectors that can improve the prosperity of the people,” Luhut said.
At the same time, the government is formulating EV policies that will provide incentives and necessary regulations, he said.