Jakarta, April 20 (Antara) - The government is almost certain to
increase subsidized premium gasoline and diesel oil prices next month
from Rp4,500 per liter to Rp6,500 or Rp7,000 for private cars.
According to Energy and Mineral Resources Minister Jero Wacik, the
government has almost reached a decision to impose a dual pricing system
on subsidized gasoline and diesel oil where two wheel vehicles and
public transportation means will still enjoy the current full subsidy
price of Rp4,500 per liter.
However, price for private cars will be raised from Rp4,500 to (reduced
subsidy) Rp6,500 or Rp7,000 per liter. "The economic price of premium
gasoline per liter is about Rp9,500 per liter. If it is sold at Rp4,500
per liter, the subsidy will reach Rp5,000 per liter. Financially capable
consumers will not enjoy the full subsidy. However, if the price is
raised to Rp6,000 they will still enjoy a subsidy of about Rp3,000 per
liter," he said.
"The people know that the government will reduce fuel subsidy. The
reason is for fairness. So, the government will cut subsidy and regulate
it to provide fairness for consumers (based on their financial
capability," Jero Wacik said.
In line with its plan to increase premium gasoline and diesel oil
prices next month, the government is now racing against time to make
technical preparations so that the plan could be implemented smoothly
without creating problems.
Deputy Minister for Energy and Mineral Resources Susilo Siswoutomo said
on Friday that his side in cooperation with the relevant parties
continued to make technical preparations for the implementation of
subsidized fuel price hikes.
"We have set a deadline to finish the technical preparations on April
26-27, 2013," the deputy minister said. After they have been completed,
the technical preparations would be submitted to a cabinet meeting
before a decision was made with regard to price increase rate and its
effective date.
Following
its announcement, the price increase will directly become effective.
"For example, the announcement is made tonight, it will directly become
effective as of 00.00 hours Western Indonesia Standard Time (WIB)," he
said.
He said that technical preparations included physical preparations such
as banners, sign boards, regulations and security measures.
However, the government, while preparing technical matters, is still
carefully considering various aspects and impacts of the policy it will
take with regard to fuel oil price hikes.
"A decision on fuel is the heaviest thing for the government to make. I
know the consequence that the people will bear," President Susilo
Bambang Yudhohono said on Twitter on Friday.
He said that the government would take an option which had the least burden to the people.
"The option that will be taken by the government is the one which has
the least burden to the people. That's why the government needs time to
decide it," President Yudhoyono said.
He said that whatever decision taken by the government with regard to
fuel oil subsidy should strengthen the economy and should not leave a
burden to the next government. He was referring to the next government
as the country would organize a legislative and presidential election
next year.
The government is planning to raise subsidized fuel prices in an effort
to reduce the subsidy burden in the state budget which has continue to
increase.
It said the quota of subsidized fuel would reach 53 million kiloliters,
exceeding the target of 46 million kiloliters in 2013 if there was no
appropriate policy taken to control consumption.
In the 2013 state budget, the government has allocated Rp274.7 trillion
in subsidy expenditure with a subsidy for the electricity sector
amounting to Rp80.9 trillion and for fuels accounting for Rp193.8
trillion with a total volume of 46 million kiloliters.
In this case, the Indonesian Employers' Association (APINDO) supports
the government's plan to raise subsidized fuel prices.
APINDO Chairman Sofjan Wanandi said APINDO was aware of the need for a
government policy to maintain healthy fiscal conditions.
However, he suggested that the government raise the price of subsidized
fuel for all types of vehicles so that it would not be bothered with
the need to carry out supervision.
"The government had better raise the price of subsidized fuel for all
types of vehicles regardless of whether they are public or private
vehicles," Sofjan Wanandi said on Friday.
He said that if the government raises the price of subsidized fuel for
private cars only, there would be a question about who was going to
supervise it.
Sofjan said that if the government's plan (to introduce a dual pricing
system) was really implemented it could lead to misappropriation. "It is
not impossible that cargo vehicles, which usually purchase and use
subsidized fuels, will resell it because they would get more money in
selling the fuel than in delivering goods," Sofjan said.
He said that raising equal prices for all types of vehicles would only
contribute one or two percent to inflation as businessmen would not
excessively increase goods prices.
Predictions have it that the impact of fuel price hikes on inflation is not significant.
According to Chief Economic Minister Hatta Rajasa, the government's
plan to raise subsidized premium gasoline and diesel oil prices for
private cars will not affect too much inflation in the country.
"It will not have a big impact because the prices of basic necessaries
generally depend on public transportation, while fuel price for this
kind of transportation is not raised. So, it will not have significant
impact on inflationary pressures," Hatta Rajasa said on the sidelines
of a seminar in Denpasar, Bali, on Friday.
He said that the subsidized fuel price hikes would only have impact on the middle income people who owned private cars.
However, he acknowledged that the fuel price increase would cause a number of basic commodities to adjust their prices.
Inflation would slightly increase but that would not seriously impact the people.
The same opinion was also expressed by state-owned bank BRI President Director Sofyan Basyir.
"The
price of subsidized fuels for private cars will be increased but fuels
for companies will remain unchanged so that its impact on inflation will
be small. The purchasing power of middle-class people will be reduced,"
he said.
He said that so far, those who enjoyed subsidized fuels were upper
middle-class consumers. With price increase for private cars, people of
that class would spend more money for fuels. But people in the lower
middle-class would not feel the impact as they only consumed small
volume of fuels.
"There will be no significant impact on inflation. The impact will be
significant if the price is raised for all classes of consumers," he
said.
The BRI president director said he supported the government's plan to
hike the price of subsidized fuels for private cars because so far the
subsidy has been enjoyed by the upper classes of people, not the lower
ones.***3***
(T.A014/ )
(T.A014/A/A. Abdussalam/O. Tamindael) 20-04-2013 12:44:24 |
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