Fuel Subsidy Policy in Indonesia an Islamic Economic Perspective

A.      Background of Study
Indonesia is known as the third world country, which in real terms has abundant natural resources, mining, fisheries (marine), forest and mineral content, etc. From all abundant natural resources, in terms of mining Indonesia is rated poorly in its management. Whereas, the various types of mines that dominate the life of many very abundant in this country, such as petroleum, natural gas, gold, silver, copper, and coal and other mining products. With the wealth of nature in such a way, then it should all the people can feel the natural wealth itself.
But ironically, Indonesia as one of the oil-producing countries, but on the other hand as an oil importing country, Indonesia is predicted will be one of the largest oil importing country in 2018 according to Chatib Basri, the Minister of Finance.[1] The society does not felt when oil prices rises because of the subsidies, but The State-Budget has considerable growth and give the consequence of infrastructure development, education, health and others faltered. However, the fuel has been subsidized until spend trillions fund,[2] deemed not on target. Such as luxury cars, motorcyles, even a car and motorcycle police with red flat.
Fuel oil is an important sector in the economy, because its effects will impact to all sectors. As reported by Ya'cob Billiocta on merdeka.com, "the President's decision to raise subsidized fuel prices will be a domino effect. In addition to causing turbulence at the society level, prices of staple corrected rises, also invited hard reaction from the Parliament".[3] The discussions that happen among the public so widespread almost throughout all society. Either the workers, the students, until to the community organizations, both in the real world or in cyberspace issued their respective arguments in response to the reduction in fuel subsidies.
In terms of mining as vital commodities affecting the lives of many people. These commodities also have an important role in the national economy.[4] Hence not permissible for the government transfer the ownership this natural resource to anyone, whether individual or group.Because it belongs to all society. Government explore so as to give all his people the opportunity to take advantage of this ownership, according to his ijtihad in managing their affairs and in order to achieve their mashlahat.[5]
Therefore, the policies issued by the government greatly affect the lives of many people. As policy by handing over management to the other party through the mechanism of Foreign Direct Investment (FDI) and privatization (sale to private / foreign).[6] It can threaten Indonesia's own natural resources. As a result, the rights of people's welfare has pulled out. The price of electricity, gasoline tend to rise, then the gas crisis so that there is a policy of gas cylinders, water crisis society, etc. This is does not comply with the constitution of 1945 article 33, paragraph 3 is oriented to people's welfare.
In a situation like this, government is seen more concerned with foreign investors than to prioritize the welfare of its people. Nasrun Haroen say "action of an authority is always to the benefit of its people".[7] As for Islam governs the management of natural resources that is described in the hadith narrated by Imam At-Timirdzi of Abyadh bin Hamal. In the hadith, narrated Abyadh has asked the Rasulullah SAW to be able to manage a salt mine. Rasul accede the request, but was soon are prohibited by a Shahabah.[8]
In Islamic Worldview, oil and gas and other mineral goods are common property that should be managed by the country only. The results of minings should be returned to the people in the form of cheap goods, or in the form of subsidies for primary needs, such as education, health and public facilities. Natural resource management paradigm based on public property private (corporate-based management) should be changed to the management of public property by the state (state-based management) to remain oriented resource conservation (sustainable resources principle).[9] It can be said that the goods included in the category of common ownership (public assets) should only be administered by the state and should not be owned by individuals or private / foreign. And more priority to domestic needs rather than having to send (export) abroad. But the otherwise, the government is more concerned with the export of out than meet its domestic needs. It is making people suffer, poverty and hunger as if evenly and become commonplace.
If the subsidy is defined as financial assistance that is paid by the state, Islam recognizes the existence of subsidies in this sense. Subsidies can be regarded a way (uslub) that may be done by the state, because it includes a giving of state property to the individual people (i’tha’u ad-dawlah min amwaliha li ar-ra’iyah) that is rightfully of government. Caliph Umar ibn al-Khattab ever give a treasures of Baitul Maal (Treasury) to farmers in Iraq so that they could cultivate their farmland.[10]
Even during the reign of the Prophet Muhammad has been done as relief assistance for the musafir (of Fadak area), assistance for people who learn their beliefs in Medina, debt payments of people who died in a poor state, and the payment of benefits for the poor.[11] Madinah country's economy was not then developed and developing according to GNP and GDP, and also does not have the State Budget (APBN) which billions of numbers. But almost all people feel comfortable, prosperous and peaceful even though non-Muslims.[12]
Due to the facts that occurred, this country including the large Muslim population in the world.[13] Then why the policies taken by the government still a part of the western world. Actually, in Islam everything is clearly regulated in such a way that all people can live with a peaceful, affluent, and prosperous.
From here that researchers wanted to know how the economy actually Islam regards fuel subsidies in Indonesia is both empirically and theoretically practice. Viewed from the side of the fuel management policy, as well as its policy to provide subsidies. Therefore here the researcher is interested to take the title "The fuel subsidy policy in Indonesia; an Islamic Economic Perspective ".
B.       Problem Formulation
Based on the above background, there are some problems that can be formulated as follows:
1.         How is the practice of fuel subsidy in Indonesia?
2.         How is the Islamic economic perspective of fuel subsidy in Indonesia?
C.      Purpose of Study
Based on the formula above problems, it can be concluded objectives of this study are as follows:
1.         To find out how the practice of fuel subsidy in Indonesia.
2.         To find out how the Islamic economic perspective of fuel subsidy in Indonesia.
D.      Significance of Study
The usefulness of this study by researcher divided into two important discussion, namely theoretical and practical.
1.      Theoritical Significance
a.       To contribute the study of Islamic Economics especially in fuel subsidy policy.
b.      To provide new insights in the education about the role of subsidy policy towards people's welfare.
c.       To give attention to the education in order to examine more deeply about the fuel subsidy policy in the view of Islam.
2.      Practical Significance
a.       To give a brief guidance for public to knowing how fuel subsidy policy in Indonesia.
b.      To give a brief guidance for public to knowing how Islamic economic looked at fuel subsidy policy in Indonesia.
c.       To give the new proposition about the state’s role to improve fuel subsidy policy.
d.      To improve fuel subsidy policy
E.       Literature Review
In this literature review, the researcher want to describe some research that related with this tittle. The purpose of this study, to clarify the position of the researcher in the study, which will be clear after this study.
Thesis written by Nur Rahmawati with title Tinjauan Hukum Islam Terhadap Pembatasan Subsidi Bahan Bakar Minyak (BBM) Jenis Premium dalam Undang-Undang No. 22 Tahun 2011”, explain how Islamic law review the restrictions on subsidized fuel price increases that impose the market prices (inflation) in terms of the law No.22 of 2011. This study is a literature study, descriptive-analysis and use of data analysis deductive-inductive. The conclusion of his research, he assumes that the fuel subsidy is a rule to make a good economic condition, but the implementation is still insufficient. Meanwhile, in the view of Islamic law restrictions on subsidies cause injustice to the poor people because the rich people could also enjoy it.[14]
The next literature, Muhammad Zen Nasrudin Fajri had written in a thesis entitled “Ketentuan-Ketentuan Intervensi Harga Dalam Ekonomi Islam (Studi Literatur)”. In his research, he aims to know the intervention prices concept according to Islamic economics and its terms as a reference for government policies in the intervention price. The method used in this research is the method of documentation, with the writing of inductive-deductive analysis and then analyzed the content. The contents of the study, the researchers concluded that justice for all parties could be realize by conducting a discussion among economists with producers or consumers who ruled the state of the market.[15]
The research, written by Miftahul Jannah entitled “Analisis Undang-Undang No. 22 Tahun 2001 Tentang Minyak dan Gas Bumi ditinjau dari Konsep Pengelolaan Kepemilikan Umum dalam Islam”. This research aims to give an explaination of how and to what extent the role of Oil and Gas, in fulfillment the needs of small and large family in terms of countries, to minimize the risks that occur. The method used in the form of qualitative analysis with exploratory research methods, which combine normative approach to the study of literature. This study provides an explanation about the ownership of property, according to Islam, especially in the common property in the category of oil and gas are reviewed in the law no. 22. 2001.[16]
In another research, written by Herman to complete his undergraduate thesis entitled Kebijakan Pemerintah dalam Penetapan Harga BBM: Suatu Tinjauan dari Perspektif Ekonomi Islam”. Explain how the Islamic concept of the role of the state in setting prices, to determine the policy of the government in setting fuel prices, and to determine the economic outlook of Islam on the determination of fuel prices by the government in 2005. The method used is the method of literature study, with descriptive analytical data processing.[17]
In another paper by Rimawan Pradiptyo and Gumilang Sahadewo Aryo entitled A Growing Pain: an Experimental Approach to Discover the Most Acceptable Strategy for Lifting Fuel Subsidy Scheme in Indonesia”. This paper aims to seek the most acceptable exit strategy of eliminating the fuel subsidy scheme in Indonesia based on Households' perspective. And research using experimental approach from the perspective of households.[18]
Based on declaration above, the writer want to complate and explain clearly about fuel subsidy policy in Indonesia an Islamic economic perspective.
F.       Theoritical Framework
Researchers will use economic theories as the theoretical framework and more particularly the theory of the role of government in the economy. These theories include:
1.      Subsidies
According Assauri in Y. Sri Susilo (2003) subsidy is a government assistance to producers or consumers for goods and services produced lower price so that people can buy with higher numbers. The amount of the subsidy normally fixed per unit of goods. In this case, the government bear some costs of production marketing.[19]
In the conventional theory, the subsidy may be seen as a negative tax (negative tax), because the subsidy adds real income. As well as tax benefits of subsidies are divided between producers and consumers, depending on the elasticity of demand and supply.[20]

2.      Ownership Theory in Islam
Fuel oil is a mineral, and mining in Islam is a public property that can not be owned by individuals because it would create a dispute in terms of getting it. In a hadith, the Prophet Muhammad. has explained that public facilities should not be owned individually:
Prophet SAW. He said: "Muslims association in three things: water, desert, and fire".[21] Ibn Majah also narrated from Abu Hurairah that the Prophet SAW. said: "The three things that will never are prohibited (for whoever owned): water, desert, and fire".
Regarding mining materials are classified into two, namely a limited number, which does not include a large amount according to the size of the individual, as well as minerals that are unlimited. The minerals that are unlimited, which might not be spent, then the mine material common property and should not be owned privately.[22]

3.      Theory of Justice in Islam
The allocation of subsidy funds is uneven, the price of fuel is increasingly screaming people, the prevalence of foreign parties in exploiting the natural resources of the country, especially in the field of oil fields. Such things cant be said with a justice in the Islamic worldview. Because the fair has a meaning in accordance with its portion (a dose).
The exact connotation of social justice is that our social system should have complate balance between the rights and obligations of individuals and the society.[23] In his writings, Sayyid Abul A'la Maududi put social justice in the first place of the basic values of the economic philosophy of Islam.
Sayyid Abul A’la Mawdudi said on his book there is no room in islam for any individual or group of persons to sit together and their own concept of justice for the society, and then impose it on the people through brute force without allowing anybody to say a word against their self-conceived notions. Resumed by him, islam guarantees people’s fundamental human rights, and in an Islamic polity there is no room for a despot or self-willed dictator.[24]
G.      Research Method
In the process of research the need for methods that describe how solving problems, so research will be more easily resolved. Therefore, the compiler will use research methods as follows:
1.      Kind of Research
In preparing this study, the authors use a kind of library research (library research),[25] the research done by reviewing and studying the data derived from the literature, such as books, magazines, journals, articles, papers, and others regarding issues of reviews Islam views the fuel subsidy. The existing literature can help policy in resolving the problem so get clear data in writing this essay.
The nature of the research authors in this study is descriptive-analysis,[26] ie to describe and summarize in detail the issues that are being investigated about government policy in response to the fuel subsidy will then be analyzed using the paradigm view of Islam.
2.      Data Sources
Collecting data in this study by reading books and browse the literature in the form of a journal and articles[27] related to monetary policy and economic overview Islamic economic perspective. After the data has been collected, author classifies into three parts, such as:
a.              Primary data is the source of the data obtained from an object of research studies of Islamic law in the form of the Qur'an and Hadith, but the two data sources is still lacking supplement in order to get a more expanded view related books, books of macro and / or micro-economics of Islam, the books of fiqh and usul fiqh books fiscal policy.
b.             Secondary data is the source of the data obtained from books and written works relating to subsidies and news, the Presidential Decree, Law, regulation, Decree of the Minister, the results of scientific studies and others that discuss perspectives Islamic economics in view of fuel subsidies and contain a problem that constituent carefully in order to make a foundation in resolving the issue.
c.              Data Tertiary is the source of the data obtained from dictionaries, encyclopedias, and so forth.
3.      Method of Data analysis
The analysis used in this research is the analysis of deductive and inductive.
a.              Deductive,[28] is data analysis based on the thinking process from the main declaration to special declaration, in other word, thus particular instance are deducted from general inferences. The writer uses this method to descript the study of fuel subsidy in the perspective of Islamic economics.
b.             Inductive,[29] the data analysis at special principle and arrange in general formulation. The writer uses this method to explain about the analysis of data from the government's policy in dealing with the fuel subsidy by using the perspective of Islamic economics.
c.              The descriptive analysis content,[30] the data analysis will be used to describe the detail of data form sources to make the conclusion. The researcher will use the descriptive analysis content method to conclude Islamic economic perspective on fuel subsidy policy in Indonesia and its effectiveness.
H.      System of Study
To simplify the study, the authors divide the systems and procedures of the study into four parts.
Chapter one, contains about introduction consisting of background of the problem, formulation of the problem, the purpose of research, usability research, literature reviews, theoretical framework, research methods, and the systematic writing.
The second chapter, consisting of a general theory of subsidies as well as a general overview of fuel subsidies that exist today with the result and influence. And what about the role of government in terms of addressing the fuel subsidy.
The third chapter, discusses how Islam regards the subsidy in the perspective of Islamic economics. And the extent of the subsidy policy in the welfare of the economy in Indonesia. And the completion of the formulation of the problem of this research.
And chapter four is closing, consisting of the conclusions in the study and then suggestions for the next writer to make this research more complete and perfect than before.

                [4] Pengantar dalam undang-undang minyak bumi dan gas. (Yogyakarta: Pustaka Yustisia. 2008), page 3.
                [5] Abdul Qadim Zallum. Sistem Keuangan Negara Khilafah. (Jakarta: HTI Press. 2009), page 108.
                [6] Some oil producers even in a foreign domicile by, among others; Chevron (44%), Mitra (16%), Total E & P (10%), Conoco Philip (8%), Medco (6%), CNOOC (5%), Petrochina (3%), BP (2%), Vico Indonesia (2%), Kodeco (1%), and others (3%). Source: Dirgen Migas. 2009.
                [7] Nasrun Haroen. Fiqh Muamalah. (Jakarta: Gaya Media Pratama. 2007), page 13.
                [8] From Abyadh bin Hammal that he came to the Prophet sallallaahu 'alaihi wasallam request to assign ownership of a plot of her salt mines and then he sets for him. When they wanted to move away someone that is on the panel said; do you know what you charge for it? Surely you set a land that has standing water. Abyadh said was said; He also canceled. He continued; he asked; What kind of land allowed to be turned on? He replied: "that is not trampled by the feet of the camel". Do Qutaibah set? He replied; Yes.
                Has told us Muhammad bin Yahya bin Abu Omar has told us Muhammad bin Yahya bin Qais Al Ma'ribi with this sanad as such. Al Ma'rib is located next to Yemen. He said; in this case there is a hadith Gharib and guide charity according to the scholars of the Companions of the Prophet sallallaahu 'alaihi wasallam and besides those on the determination of the soil. They allow an imam set one's land section. (H.R. At Tirmidzi no. 1301. This hadith was passed by Syaikh Al Bani in Ash Shahih wadh Dha’if Sunan At Tirmidzi Chapter 3, page 380).
[9] Muhammad Ismail Yusanto. Pengelolaan Sumber Daya Alam dalam Perspektif     Islam. Source: http://dokumen.tips/documents/pengelolaan-sumber-daya-alam-dalam-perspektif-islam. html. Accessed on 2 Juni 2016.
                [10] The explanation is quoted by KH. Siddiq al-Jawie of the book An-Nabhani, (2004, p. 11) in an article in http://jurnal-ekonomi.org/pandangan-islam-tentang-subsidi/. 11 September 2015.
[11] Adiwarman Azwar Karim. Sejarah Pemikiran Ekonomi Islam. (Jakarta; PT. Raja Grafindo Persada, 2012), page. 51.
[12] Ibid., page. 36.
[13] According to data published in 2010 wikipedia.org, the world's largest Muslim population in Indonesia with a population of 204 847 000 inhabitants, followed by Pakistan and India 178 097 000 177 286 000 inhabitants. Source:http://en.wikipedia.org/wiki/Islam_by_country 30 November 2014.
[14] Nur Rahmawati.  “Tinjauan Hukum Islam Terhadap Pembatasan Subsidi Bahan Bakar Minyak (BBM) Jenis Premium Dalam Undang-Undang No. 22 Tahun 2011”. Thesis. Yogyakarta: Fakultas Syariah dan Hukum. Universitas Islam Negri Sunan Kalijaga.
[15] Muhamad Zen Nasrudin Fajri. “Ketentuan-Ketentuan Intervensi Harga dalam Ekonomi Islam (Studi Literatur)”. Thesis. Ponorogo: Program Studi Mu’amalat. Fakultas Syariah. Institut Studi Islam Darussalam Gontor.
                [16] Miftahul Jannah. “Analisis Undang-Undang Nomor 22 Tahun 2001 Tentang Minyak dan Gas Bumi ditinjau dari Konsep Pengolahan Kepemilikan Umum dalam Islam”. Thesis. Jakarta: Konstrasi Perbankan Syariah. Program Studi Mu’amalat. Fakultas Syariah dan Hukum. UIN Syarif Hidayatullah.
                [17] Hermawan. “Kebijakan Pemerintah dalam Penetapan Harga BBM: Suatu Tinjauan dari Perspektif Ekonomi Islam”. Thesis. Jakarta: Jurusan Mu’amalat (Ekonomi Islam). Fakultas Syari’ah dan Hukum. UIN Syarif Hidayatullah.
                [18] Rimawan Pradiptyo dan Gumilang Aryo Sahadewo. “A Growing Pain: an Experimental Approach to Discover the Most Acceptable Strategy for Lifting Fuel Subsidy Scheme in Indonesia. MPRA’s paper was published by Departemen Ekonomi dan Bisnis, Fakultas Ekonomi, Universitas Gajah Mada, (MPRA Paper No. 37073, posted 3. March 2012 19:15 UTC), online at http://mpra.ub.uni-muenchen.de/37073/.
                [19] Antariksawan. “Analisis Komparasi Pola Pengeluaran Konsumsi Antara Masyarakat Berpendapatan Tetap dan Masyarakat Berpendapatan Tidak Tetap Pasca Penghapusan Subsidi Bahan Bakar Minyak (Studi Kasus di Kecamatan Salaman Kabupaten Magelang)”. (digilib UNS-Fakultas Ekonomi Jurusan Ekonomi Pembangunan-F.0102017-2006, 2006), page 9.
[20] Prathama Rahardja dan Mandala Manurung. “Pengantar Ilmu Ekonomi: Mikroekonomi & Makroekonomi”. (Jakarta; Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia, 2008), page 50.
                [21] HR. Abu Daud.
                [22] Taqyuddin An-Nabhani. Op.cit., page 238-239.
                [23] Sayyid Abul A’la Mawdudi. First Priciple of: Islamic Economics. (Islamabad, Pakistan: IPS Press. 2013), page 81.
                [24] Ibid., page 239.
                [25] Library research is often referred to as a desk study or research of secondary data. That is, the researchers did not have struggling to searching for data through surveys, either through questionnaires or interviews, or observation, all the data is already there live search and recall only through print media or electronic media. Hendri Tanjung dan Abrista Devi. “Metodologi Penelitian Ekonomi Islam”. (Jakarta; Gramata Publishing, 2013), page 94.
                [26] Ulber Silalahi. Metode Penelitian Sosial. Cetakan Ketiga (Bandung: PT Refika Aditama. 2012), page 10.
[27] Hendri Tanjung dan Abrista Devi. op.cit., page 57.
                [28]. Ulber Silalahi. Ibid., page 339.
                [29]. Ibid., page 341.
                [30]. Ibid., page 336.

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