GOVT URGED TO MAINTAIN PRICE STABILITY

By Andi Abdussalam

Jakarta, March 28 (ANTARA)  - The prices of basic necessities are reportedly showing an upward trend in many provinces in the run-up to the government plan to increase fuel oil prices next Sunday.          But the government denied it saying increases only happened to certain commodities, including chili. Chief Economic Minister Hatta Rajasa argued that price increases in many provinces were due to speculative buying of fuel oils by certain individuals.          Although Minister Hatta Rajasa has denied the price increase, yet many people have also complained of increases in the prices of various basic necessaries in the face of imminent fuel oil price hike.         Therefore, legislators urged the government to help maintain price stability. "The government should remain focused on maintaining price stability and the people's purchasing power. The increase in commodity prices has relations to the planned fuel oil price increase. If it has no relations, there must be no price increases in many regions," legislator Rofi Munawar of the House of Representatives (DPR) Commission IV on agriculture affairs said.          According to the legislator, the average price increase  almost reached 30 to 50 percent. He quoted the prices of rice and chili in Rawa Badak market, North Jakarta, which had been on the rise. The  Rojo Lele rice was previously sold at Rp7500 per kg, now it sells Rp10,000 per kg. The same thing also happened to the other types of rice whose prices rose by between 20 percent and 30 percent.         In the Kreo Market of Tangerang, near Jakarta, the price of chili rose by about 50 percent, red unions and garlic also increased. The price of garlic has risen by about Rp4,000 per kg from Rp20 thousand earlier.          Other legislator Ma'mur Hasanuddin of the same House Commission reminded the government of possible emergence of food problems if it raised fuel oil prices. There has been unrest among the people that scarcity would emerge if the government increases fuel oil prices.     It will affect heavily farmers and fishermen.          "Farmers and fishermen are among the people who become most restless as a result of the fuel oil price hike. The fuel oil price increase has effects on national economy and has now affected them," he said.         The ongoing grand rice harvest in the country is not something that has to be pride of when at the same time farmers must face fuel oil price increases. Although the government has revised its fixed purchasing price and increase it to Rp6,600 per liter, in reality farmers have not yet been able to enjoy its economic benefit.          According to Rofi Munawar, the people have the experience that in the run-up to the Lebaran holidays and the announcement of a fuel oil price increase, the prices of basic necessities usually increased.          "Prices of essential commodities often rise not only because of the flow of distribution and economic transaction mechanism but also of psychological and social factors," he said.          In the meantime, Hatta Rajasa has denied that food commodity prices are increasing in the run-up to the fuel oil price hikes.          "It is not true that prices are going up. I would like to explain that today the rice prices, in general, went down by 1.12 percent compared to the previous month. So, prices are showing a downward trend," the minister said on Wednesday.          He explained that the price of the cheapest type of rice also decreased by 1.23 percent, chicken meat by 6.47 percent, local chicken eggs by 5.16 percent and soybeans by 0.17 percent.          The minister noted, however, that the price of cayenne rose by 39.66 percent and that of red chili by 16.88 percent. "The prices of these commodities are rising while those of others are showing a downward trend,¿ the minister asserted.         Hatta is convinced that price increase of food commodities may happen only because of speculators' acts and hampered goods distribution. Therefore, he hoped that price speculators were prevented and the barriers of goods distribution removed.         "Goods must be distributed speedily and should particularly not be disturbed during the current storm and high wave season. I hope supplies continue to run smoothly," the minister said.          He pointed out that the prices of basic necessities remained stable even if the prices of fuel oil will shortly be increased.         "Yes, there are price increases in several regions but most of the commodities still enjoyed a stable price," Hatta said.         He said that in general, rice prices declined by 1.12 percent if compared with that in last February from Rp10,540 per kg to Rp10,402. The price of the cheapest rice dropped by 1.23 percent to Rp8,287 per kg.         Based on the observation in 66 cities in the country, prices in 44 provinces experienced a downward trend while in 22 others, increased slightly and was stable.      The government is planning to hike the prices of subsidized fuel oil on April 1 and has submitted two options to the House of Representatives (DPR). In the first proposal, the government seeks to raise the price of subsidized premium gasoline from Rp4,500 to Rp6,000 per liter, and diesel oil from Rp4,500 to Rp6,000 per liter.***2*** (T.A014/INE/A014) 28-03-2012 23:4