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Consumer groups and analysts slammed the government’s plan to prohibit private car owners from using Premium, the widely used state-subsidized fuel, saying the infrastructure to provide alternatives on a large-scale is not yet ready.

“It is a panic policy,” Tulus Abadi, managing director of the Indonesian Consumer Protection Foundation (YLKI) said on Wednesday. “On one side the government can’t afford to subsidize the fuel, but on the other they don’t have the guts to say out loud that they’re raising the fuel price.”

The prohibition starts on April 1 on Java and Bali, though public transportation vehicles and motorcycles will be exempt. The regulation will also go into effect in Sumatra and Kalimantan during the second half of 2013; Sulawesi in the first half of 2014; and Maluku and Papua in the latter half of that year.

Ibrahim Hasyim, a top official of downstream energy regulator BPH Migas, said on Wednesday that the government would revoke the licenses of gas pump operators that continue to sell Premium to private cars once the policy has been implemented.

By implementing these restrictions, the government wants to ensure that subsidized spending won’t exceed its target, as occurred last year.

In 2011, the government spent Rp 165 trillion ($18 billion), 130 percent of the Rp 127 trillion allotted for fuel subsidies in the budget. The higher subsidy level was due to higher crude oil prices and an increase in consumption of subsidized fuel, which was 1.5 million liters more than the quota of 40 million kiloliters.

However, the impact from the ban, Tulus said, would be equivalent to the government raising the fuel price.

Fuel prices are a sensitive issue because it drives up inflation. In October 2005, annual inflation quickened to 17.9 percent from 9.1 percent a month earlier after the government raised subsidized fuel prices.

In a bid to encourage private car users to switch from gasoline to natural gas, Energy Minister Jero Wacik said that the government had provided 250,000 converter kits, which would cost Rp 11 million to Rp 14 million per unit. The devices can shift fuel use from gasoline to processed natural gas, including liquefied gas for vehicle (LGV) or compressed natural gas (CNG).

The government aims to sell them in Jakarta and surrounding cities, including Bogor, Tangerang and Bekasi starting April 1, before expanding into other regions.

Jero said the government has allocated Rp 900 billion for the energy ministry to support the fuel rationing and fuel shifting programs.

Currently, Premium is sold at Rp 4,500 per liter, while the price for two products with higher octane gasoline, Pertamax and Pertamax Plus, fluctuates at around Rp 8,000 to Rp 9,000. Jero said that LGV will be sold at Rp 5,600 per liter of oil equivalent while CNG would be sold at Rp 3,100 per liter.

The fuel rationing plan is nothing new to Indonesians. The House of Representatives rejected it several times in the past, following widespread public protests.

“Regarding the shift to natural gas, this is silly,” said Juniman, an economist at Bank Internasional Indonesia.

“The infrastructure is not ready. If there were some people who were willing to convert their fuel into natural gases, where can they fill their tanks?”

In Jakarta alone, there are only six fuel pumps that sell CNG, while 10 provide LGV. They are all owned by Pertamina, the state’s oil and gas company.