Jakarta (Platts)--4Dec2012/423 am EST/923 GMT

The Indonesian parliament's Commission VII on energy and mining issues has agreed to increase the quota for subsidized fuels by 1.23 million kiloliters to 45.27 million kl, which means an additional fuel subsidy of Rupiah 6 trillion ($625 million), the commission's Chairman Sutan Bhatoegana said Tuesday.

"Commission VII has agreed to the proposal, but we asked the government to hold an audit of its fuel distribution management this year," he said.

This is the second time this year that the parliament has hiked the quota for subsidized fuels.

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The quota was already hiked in September to 44.04 million kl from the original 40 million kl, causing the fuel subsidy bill to jump to Rupiah 219.5 trillion from Rupiah 137.4 trillion. The additional quota comprised 3.43 million kl of gasoline and 1.11 million kl of gasoil.

The latest hike in quota will increase Indonesia's total fuel subsidy bill for 2012 to Rupiah 225.5 trillion.

Bhatoegana said the only way to contain consumption of subsidized fuels next year was to hike the prices. But the government's earlier attempts to restrain consumption by preventing private cars with engine capacity of 1,600 cc and more from buying subsidized 88 RON gasoline and hiking the price of subsidized fuels have not been successful.

Indonesia subsidizes 88 RON gasoline, gasoil and kerosene.

Indonesia's consumption of subsidized fuels in 2011 stood at 41.79 million kl, comprising 25.53 million kl of 88 RON gasoline, 1.7 million kl of kerosene and 14.56 million kl of gasoil.

--Anita Nugraha, newsdesk@platts.com --Edited by E Shailaja Nair, shailaja_nair@platts.com

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