Jakarta, Oct 29 (Antara) - Rumors have it that the new government will
raise subsidized fuel oil prices early in November, but with two days
remaining, there is no yet certainty for the government to raise it
soon.
Vice President Jusuf Kalla is still uncertain about when the price of
subsidized fuel will be increased. "I think it will not happen in the
near future. Let us just wait and see," he informed newsmen at his
office last Friday.
He stated that the issue had indeed been discussed at length during
ministerial level meetings and seminars, but no date has, so far, been
set for when it will happen.
Former chief economic minister Chairul Tanjung said the upcoming
government under Joko Widodo, better knwon as Jokowi, was expected to
raise the prices of subsidized oil fuels next month.
"Information I have from the economic team of the next government,
thanks God, that they will raise the price of fuels in November,"
Chairul said after attending a ceremony of the National Economic
Committee on Economic Prospects, 2015.
However, until Wednesday, the new government has not yet made any
decision regarding the price of subsidized fuel. Energy and Mineral
Resources Minister Sudirman Said explained that no decision yet has
been taken to raise fuel oil prices.
"But there will be a diversion of fuel subsidy, from the rich to the
poor," he said on Wednesday, referring to the subsidized fuels that the
rich and not the poor are believed to be enjoying.
In order not to confuse the people, newly appointed Chief Economic
Minister Sofyan Djalil said on Wednesday that the government will soon
make announcement with regard to government policy on subsidized fuels
that have created public unrest.
"The government is aware of the people's concern about the matter. But
it hopes that the people will wait for its explanations in the near
future," said Sofyan after holding a coordination meeting on Tuesday.
The coordinating economic minister said that a decision which involved a
crucial thing needs to be well coordinated first.
Currently nothing could be made public yet because the government has
not yet discussed a plan to raise subsidized fuel prices.
In the meantime, new Finance Minister Bambang Brodjonegoro responded to
the market players who became restless in waiting for the government's
explanations regarding its plan to raise the prices. He said the
government was committed to carrying out reforms.
Yet, carrying out reforms --one of which concerns the policy to raise
subsidized fuel prices-- is not that easy because the government has to
consider the impact of the decision on the real sector and small people.
"If one asks about policy A or policy B, we will say we are now
preparing it. We want its impact on the people to be minimized as well
as possible," remarked the finance minister.
For this purpose
the government is willing to prepare everything very carefully so that
the policy will not negatively affect the people too much. Thus, the
government hopes that the reforms it is carrying out will have a
long-term impact for the improvement of the national economy.
After all, a decision to raise fuel oil prices will increase the
expenditure on logistics by up to 10 percent, particularly if the
subsidized premium gasoline is raised by Rp3,000 a liter, according to
Chief of the Indonesian Logistics Association, Zaldy Masita.
"The
logistics costs could rise by 7 to 10 percent," he stated on Monday.
Masita further noted that higher expenditure on logistics could also
hike transportation costs by 20 to 30 percent.
He explained that a rise in expenses on logistics and transportation
will have a considerable impact on the price of basic commodities,
including rice and cooking oil. "Basic commodities constitute a large
part of logistics," he added.
Therefore,
Masita asked the new government to first mitigate the impact of hike in
logistics and transportation costs on basic commodity prices before
increasing the price of subsidized fuel oils.
Deputy Governor of Bank Indonesia (BI) Perry Warjiyo has predicted
that if the fuel price is increased by Rp3,000 per liter, it will
contribute around 3 to 3.5 percent to the inflation. However, it will
depend on the second and third round effects.
The first round effect will contribute 1.5 percent to the inflation,
while the second round effect will depend on the cost of city
transportation services and other factors.
Yet, the central bank supported President Jokowi's plan to increase
fuel oil prices that have, so far, burdened the State Budget (APBN).
The fuel price hike will reduce pressure on the APBN and offer more
space for a bigger fiscal, BI Governor Agus Martowardojo stated last
Friday.
"If there is no fuel price hike, it will have a bad impact because the
public has calculated the impacts of the fuel price rise in 2014," he
pointed out.
Former
finance minister Chatib Basri has revealed that if the fuel price is
raised by Rp3,000 per liter in November, then a total of Rp21 trillion
in energy subsidy will be saved, and this is substantial as it is around
0.2 percent of the Gross Domestic Product.
As of August 29, the fuel subsidy spending reached Rp162.4 trillion or
65.9 percent of the ceiling set at Rp246.5 trillion in the revised 2014
budget.
The ceiling may be broken unless no efforts are taken to curtail the use of subsidized fuels.
Therefore, the Downstream Oil and Gas Regulatory Agency (BPH Migas) has
limited the consumption of subsidized fuel in a bid to meet the quota
stipulated in the state budget amounting to 46 million kiloliters in
2014.***2***
(T.A014/b003/B003)
(T.A014/A/BESSR/Bustanuddin) 29-10-2014 23:45:0 |
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