By Andi Abdussalam
Jakarta, Dec 17 (ANTARA) - Labeled as the worst-managed in Indonesia's history, this year's hajj pilgrimage has become the subject of a motion of at least 121 legislators for a parliamentary inquiry into the government's performance in organizing the annual activity.
The lawmakers proposed on Tuesday the establishment of a hajj inquiry committee which is expected to issue a recommendation that the government should terminate its dual role of regulator as well as operator of hajj pilgrimages which cost over US$700 million per year.
"We do not rule out the possibility that we will recommend the separation of the government's role as regulator from that as operator of the hajj pilgrimage," House of Representatives (DPR) Speaker Agung Laksono said here on Tuesday.
The House Speaker made the remarks in response to a proposal submitted by 121 legislators to set up an inquiry committee over the government's organization of the hajj pilgrimage.
He received the proposal for the inquiry at the DPR building on Tuesday. The proposal was submitted by the initiators, including Abdullah Azwar Anas of the National Awakening Party (PKB) faction and was supported by various political party factions in House such as the factions of Golkar, PKB, the United Development Party (PPP), the National Mandate Party (PAN), the Prosperous Justice Party (PKS), the Reforms Star Party (PBR) and the Indonesian Democratic Party of Struggle (PDI-P).
Teams fielded by the Regional Representatives Council (DPD) have found weaknesses in the implementation of the hajj pilgrimage programs, describing it as the worst in the history of hajj management in Indonesia.
"Our teams in Saudi Arabia and at home found that this year's hajj services were the worst one, particularly with regard to accommodations and transportation services," DPD deputy chairman Laode Ida said.
He said that the location of Indonesian hajj pilgrims' housing accommodation was the farthest this year away from the Haram Mosque, even it is located some 18-19 km away.
As a result of lack of transportation means that served the Jeddah-Madina-Makkah routes, Indonesian hajj pilgrims were compelled to go on foot. He said that the bad hajj pilgrimage management indicated the failure of the Ministry of Religious Affairs in providing appropriate hajj services.
In order to overcome the problem, the chief organizer of Indonesian Hajj Pilgrimages (PPIH) in Saudi Arabia, Nur Samad Kamba, said the government should set certain service standards for the hajj pilgrimage program next year to serve as guidance for field officials in carrying out their tasks.
Service standards are needed to handle the pilgrimage of over 200,000 hajj pilgrims every year.
"Professional service standards had better be set so pilgrims who pay more will get more service as well. The standards should be set based on an agreement by all parties involved," he said in Jedda on Tuesday.
He said that the service standards should be made based on professional service paradigm and should be contained in a government decision and working plan.
Without professional standards, the services rendered by the government during the hajj pilgrimage this year have disappointed hajj pilgrims due to, among other things, delays, expensive airline tickets, inappropriate accommodations and transportation services in Saudi Arabia
"This indicates that the ministry of religious affairs still applied the trial and error approach, while we should not do so in organizing a religious ritual," Laode said.
The DPD therefore came up with the idea to propose the separation of the authority as regulator and as operator of the country's hajj pilgrimage services. With regard to this, it supported the proposal by 121 legislators for establishment of an inquiry committee over the organization of 2008 hajj pilgrimage services.
"The DPD supports the establishment of an inquiry committee on the 2008 hajj pilgrimage services as proposed by several initiators such as Abdullah Azwar Anas of the House Commission VIII on religious affairs," Laode Ida said.
The legislators have submitted a hajj inquiry committee establishment proposal in their efforts to find facts on the hajj management.
"The House is trying its best to uncover problems faced in the execution of hajj pilgrim services and to encourage serious efforts to improve it, House Speaker Agung Laksono said.
One of the improvements is the separation of the government role as regulator from that as operator, while the implementation of the services could be carried out by the private sector and regional governments.
He said that the House might issue a recommendation to terminate the government's dual function of regulator as well as operator of the annual hajj pilgrimage. This caused efforts to improve hajj pilgrimage services to run very slowly.
Laksono said the DPR leadership would take follow-up steps on the proposal. The legislators were of the view that the organization of this year's hajj pilgrimage was worse than last year.
He said the number of legislators proposing the inquiry had exceeded the minimum required by regulations, namely at least 13 legislators from different factions. (T.A014/A/HAJM/19:45/A014) 17-12-2008 19:48:20
Kamis, 25 Desember 2008
PARTICIPATION IN POLLS IS A RIGHT OR OBLIGATION?
By Andi Abdussalam
Jakarta, Dec 14 (ANTARA) - Less than four months before the quinquennial legislative election is held in Indonesia on April 9, 2009, one of the issues that have surfaced in public discourses is the 'golput' (deliberate non-voters or an acronym for 'golongan putih'), a local term used to refer to a group of eligible voters who decide not to use their voting rights.
Concerns on a possible increase in the number of 'golputs' have been raised in public debates of late, particularly following a call by a national figure on his sympathizers to stay away from the election.
The call might not have a significant impact on the voters as a whole. Yet, as it was made by former president Abdurraman Wahid or Gus Dur, who is also former chairman of the largest Muslim organization Nahdatul Ulama (NU), it soon sparked controversies.
"He should have not made the call. He is a statesman and should not voice anything not good for the nation," General Elections Commission (KPU) Chairman Abdul Hafiz Anshary said.
Anshary is not alone in disagreeing with the former president's move. The General Chairman of the NU Executive Board Hasyim Muzadi has even stressed that NU members have the obligation to participate in elections.
Last month, Gus Dur, who is chairman of the Legal Council of the National Awakening Party (PKB) called on PKB regional branches to boycott the legislative, regional representatives (DPD), and presidential elections next year.
"We will boycott all the elections," Abdurrahman Wahid said.
Gus Dur called for a boycott to show his discontent with the KPU which only recognized the PKB executive board under Muhaimin Iskandar while the one under his leadership was not registered as the legitimate PKB.
The KPU recognized the leadership of Iskandar who had won a legal battle against Gus Dur in the leadership split case of the PKB.
Gus Dur said he was optimistic that his calls would be followed by his supporters. "All of the 420 units of PKB that have the right to take part in the elections will boycott the polls," he said.
However, KPU chairman Abdul Hafiz Anshary regretted the former president's call, saying the law required all components of the nation to support the implementation of the general elections. The elections would be carried out with the participation of the people.
According to PBNU general chairman Muzadi, members of NU should not join the 'golput' groups of voters.
"Casting a vote in the general elections is a process of building the state. In this context, it is obligatory for NU members to involve themselves in it," Muzadi said.
Muzadi even referred to an NU forum held in Lombok to discuss the matter. In the runup to the general elections in 1997, NU through the Lombok Ulemas forum discussed the legal (religious) aspect of exercising a voting right in the elections.
"Participation in elections is obligatory. However, NU will not prohibit its members from becoming a 'golput' because it concerns their own personal political interest," he said.
What has been decided during the Lombok Ulemas forum might be a kind of edict, particularly for Muslim voters, issued to prevent them from boycotting the elections.
According to the Chairman of the People's Consultative Assembly (MPR), Hidayat Nurwahid, edicts issued by religious organizations that ban people from joining the (golput) group are effective to increase people's participation in the polls.
"There have been edicts on 'golput' issued by religious organizations such as the one by NU," Nurwahid told the press on Friday.
Nurwahid, who is former president of the Prosperous Justice Party (PKS) said that such edicts were important to make the elections a success but suggested that people should adopt proportional attitude because there was also a national figure who had called on people not to use their voting rights.
A high people's participation in the elections indicates that they have become more mature in exercising their democratic rights.
Therefore, edicts that call on people to cast their votes are good for democracy. An edict is an effective means to prevent people from obeying a call for elections' boycott.
House of Representatives (DPR) Speaker Agung Laksono, however, does not agree with the issuance of edicts which ban people from withholding their votes from the general elections.
"I do not agree with the idea because the participation in an election is not an obligation. Our law does not require people to take part in a general election. So, I am just referring to the law. To my mind, it (the idea) is wrong because participating in an election is only a political right," Laksono said on Friday.
He said the law did not require people to exercise their voting right. "So, what we can do is only giving abstainers good advice and suggestions," he added.
Laksono said he was also against putting negative labels on people who refused to take part in elections, or who preferred to join 'golput' (abstainer) groups.
He called on political parties and their leaders to conduct an introspection. "We had better not judge those who join the 'golput' groups. Maybe, it is the behavior of the political parties or their leaders that has to be improved," Laksono said.
The same opinion is also expressed by Anas Urbaningrum, an executive chairman of the Democrat Party.
"Edicts banning people from joining the 'golput' groups are not needed because casting a vote in an election is a right not an obligation," he said. "Abstaining from the election is a right, though it is not good for democray." (T.A014/A/HNG/B003).14-12-2008 23:00:39
Jakarta, Dec 14 (ANTARA) - Less than four months before the quinquennial legislative election is held in Indonesia on April 9, 2009, one of the issues that have surfaced in public discourses is the 'golput' (deliberate non-voters or an acronym for 'golongan putih'), a local term used to refer to a group of eligible voters who decide not to use their voting rights.
Concerns on a possible increase in the number of 'golputs' have been raised in public debates of late, particularly following a call by a national figure on his sympathizers to stay away from the election.
The call might not have a significant impact on the voters as a whole. Yet, as it was made by former president Abdurraman Wahid or Gus Dur, who is also former chairman of the largest Muslim organization Nahdatul Ulama (NU), it soon sparked controversies.
"He should have not made the call. He is a statesman and should not voice anything not good for the nation," General Elections Commission (KPU) Chairman Abdul Hafiz Anshary said.
Anshary is not alone in disagreeing with the former president's move. The General Chairman of the NU Executive Board Hasyim Muzadi has even stressed that NU members have the obligation to participate in elections.
Last month, Gus Dur, who is chairman of the Legal Council of the National Awakening Party (PKB) called on PKB regional branches to boycott the legislative, regional representatives (DPD), and presidential elections next year.
"We will boycott all the elections," Abdurrahman Wahid said.
Gus Dur called for a boycott to show his discontent with the KPU which only recognized the PKB executive board under Muhaimin Iskandar while the one under his leadership was not registered as the legitimate PKB.
The KPU recognized the leadership of Iskandar who had won a legal battle against Gus Dur in the leadership split case of the PKB.
Gus Dur said he was optimistic that his calls would be followed by his supporters. "All of the 420 units of PKB that have the right to take part in the elections will boycott the polls," he said.
However, KPU chairman Abdul Hafiz Anshary regretted the former president's call, saying the law required all components of the nation to support the implementation of the general elections. The elections would be carried out with the participation of the people.
According to PBNU general chairman Muzadi, members of NU should not join the 'golput' groups of voters.
"Casting a vote in the general elections is a process of building the state. In this context, it is obligatory for NU members to involve themselves in it," Muzadi said.
Muzadi even referred to an NU forum held in Lombok to discuss the matter. In the runup to the general elections in 1997, NU through the Lombok Ulemas forum discussed the legal (religious) aspect of exercising a voting right in the elections.
"Participation in elections is obligatory. However, NU will not prohibit its members from becoming a 'golput' because it concerns their own personal political interest," he said.
What has been decided during the Lombok Ulemas forum might be a kind of edict, particularly for Muslim voters, issued to prevent them from boycotting the elections.
According to the Chairman of the People's Consultative Assembly (MPR), Hidayat Nurwahid, edicts issued by religious organizations that ban people from joining the (golput) group are effective to increase people's participation in the polls.
"There have been edicts on 'golput' issued by religious organizations such as the one by NU," Nurwahid told the press on Friday.
Nurwahid, who is former president of the Prosperous Justice Party (PKS) said that such edicts were important to make the elections a success but suggested that people should adopt proportional attitude because there was also a national figure who had called on people not to use their voting rights.
A high people's participation in the elections indicates that they have become more mature in exercising their democratic rights.
Therefore, edicts that call on people to cast their votes are good for democracy. An edict is an effective means to prevent people from obeying a call for elections' boycott.
House of Representatives (DPR) Speaker Agung Laksono, however, does not agree with the issuance of edicts which ban people from withholding their votes from the general elections.
"I do not agree with the idea because the participation in an election is not an obligation. Our law does not require people to take part in a general election. So, I am just referring to the law. To my mind, it (the idea) is wrong because participating in an election is only a political right," Laksono said on Friday.
He said the law did not require people to exercise their voting right. "So, what we can do is only giving abstainers good advice and suggestions," he added.
Laksono said he was also against putting negative labels on people who refused to take part in elections, or who preferred to join 'golput' (abstainer) groups.
He called on political parties and their leaders to conduct an introspection. "We had better not judge those who join the 'golput' groups. Maybe, it is the behavior of the political parties or their leaders that has to be improved," Laksono said.
The same opinion is also expressed by Anas Urbaningrum, an executive chairman of the Democrat Party.
"Edicts banning people from joining the 'golput' groups are not needed because casting a vote in an election is a right not an obligation," he said. "Abstaining from the election is a right, though it is not good for democray." (T.A014/A/HNG/B003).14-12-2008 23:00:39
GOVT MOVING AT SNAIL'S PACE TO DECIDIE FUEL PRICES
By Andi Abdussalam
Jakarta, Dec 13 (ANTARA) - After sky-rocketing from US$120 a barrel in May to US$147 in July, the world crude price fell to about US$40 a barrel this month, leaving the government confused about how to readjust domestic oil prices.
When the crude price in the world market hovered at US$120 a barrel in May, the government decided to raise fuel oil prices at home in order to keep its fuel oil subsidies down.
After transportation and production costs as well as commodity prices had escalated because of domestic fuel oil price increases, the world crude price made a U-turn, while the government, amid mounting public clamor to respond to the downturn, is still moving at a snail's pace. Though it lowered the subsidized premium gasoline price early this month, yet many saw the reduction as insignificant.
"The government is still waiting for stable trends in the world market to determine the economically realistic level of domestic fuel prices. As soon as we know the realistic level, we will announce it," Energy and Mineral Resources Minister Purnomo Yusgiantoro said here on Friday.
Oil and Gas Director General Evita Legowo said meanwhile that the government was still studying the lowering of fuel oil prices but her office had found that the economically realistic price of diesel oil was still above the subsidized price of Rp5,500 per liter.
Previously, based on the calculations of the energy and mineral resources ministry, the economic price of premium gasoline on December 1, was Rp4,800 per liter or below the subsidized price of Rp5,500 a liter.
Calculations of the fuel oil prices for January 2009 would be based on the average price of oil prices and exchange rates from December 1 to 31, 2008.
The world crude price has dropped by US$100 a barrel within a period of less than five months since it was recorded at US$147 per barrel in mid July 2008. The price now is about US$40 per barrel and showing a continuous downward trend.
When the world crude oil price hovered at US$120 a barrel (increasing US$95 in January), the government decided in May 24, 2008 to raise fuel oil prices by an average 28.7, in order to withstand fuel oil subsidy which could reach Rp125 trillion.
It raised the price of premium gasoline from Rp4,500 to Rp6,000 per liter, diesel oil from Rp4,300 to Rp5,500 and kerosene from Rp2,000 to Rp2,500.
With the price increases, the government was expected to be able to save up to Rp25.877 trillion in fuel oil subsidy funds from the state budget.
In the meantime, it also allocated Rp14,1 trillion for a cash transfer program for some 19,1 million low-income families across the country. The assistance was meant to protect the poor from the impact of the fuel price increase.
Even though the government had raised fuel oil prices by an average of 28.7 percent in May, the world crude price continued to skyrocket until it reached its peak at US$147 a barrel in July that pushed up the amount of subsidy.
According to Evita Legowo, the government has pushed up the amount of subsidy for fuel oils. The realization of subsidized budget up to October this year has reached Rp130 trillion, exceeding the subsidy target set at the 2008 revised budget at Rp126 trillion.
Luckily, after reaching its peak in July, the world crude price began to decline.
After all, bubble of financial crisis exploded in the United States. In October, crude prices dropped to US$90 a barrel following fear that the financial crisis in the United States would spread to other countries even though the US government had provided a US$700 bailout package for collapsed financial institutions.
In that conditions, observers warned it may push down the crude prices to US$70 a barrel at the end of the year, cutting state revenues from oil by Rp30 trillion.
On October 6, the price of 'light-sweet' oil in main contract trading in New York had fallen to US$87.81 per barrel for November shipment, and in London, the price of "Brent North Sea" dropped to US$83.68 per barrel.
In line with declining prices of crude in the world market, pressures at home that the government should lower fuel oil prices mounted.
Thus, the government on December 1, 2008 decided to cut the price of subsidized premium gasoline by Rp500 from Rp6,000 per liter effective December 1, 2008, but maintained the price of diesel oil at least until December 31.
It has promised, however, to lower diesel oil price in January and considered cutting again that of premium gasoline. The rates have yet to be announced.
"The government will review fuel oil prices each month," Energy and Mineral Resources Minister Purnomo Yusgiantoro said. (T.A014/A/HAJM/17:20/a014) 13-12-2008 17:20:55
Jakarta, Dec 13 (ANTARA) - After sky-rocketing from US$120 a barrel in May to US$147 in July, the world crude price fell to about US$40 a barrel this month, leaving the government confused about how to readjust domestic oil prices.
When the crude price in the world market hovered at US$120 a barrel in May, the government decided to raise fuel oil prices at home in order to keep its fuel oil subsidies down.
After transportation and production costs as well as commodity prices had escalated because of domestic fuel oil price increases, the world crude price made a U-turn, while the government, amid mounting public clamor to respond to the downturn, is still moving at a snail's pace. Though it lowered the subsidized premium gasoline price early this month, yet many saw the reduction as insignificant.
"The government is still waiting for stable trends in the world market to determine the economically realistic level of domestic fuel prices. As soon as we know the realistic level, we will announce it," Energy and Mineral Resources Minister Purnomo Yusgiantoro said here on Friday.
Oil and Gas Director General Evita Legowo said meanwhile that the government was still studying the lowering of fuel oil prices but her office had found that the economically realistic price of diesel oil was still above the subsidized price of Rp5,500 per liter.
Previously, based on the calculations of the energy and mineral resources ministry, the economic price of premium gasoline on December 1, was Rp4,800 per liter or below the subsidized price of Rp5,500 a liter.
Calculations of the fuel oil prices for January 2009 would be based on the average price of oil prices and exchange rates from December 1 to 31, 2008.
The world crude price has dropped by US$100 a barrel within a period of less than five months since it was recorded at US$147 per barrel in mid July 2008. The price now is about US$40 per barrel and showing a continuous downward trend.
When the world crude oil price hovered at US$120 a barrel (increasing US$95 in January), the government decided in May 24, 2008 to raise fuel oil prices by an average 28.7, in order to withstand fuel oil subsidy which could reach Rp125 trillion.
It raised the price of premium gasoline from Rp4,500 to Rp6,000 per liter, diesel oil from Rp4,300 to Rp5,500 and kerosene from Rp2,000 to Rp2,500.
With the price increases, the government was expected to be able to save up to Rp25.877 trillion in fuel oil subsidy funds from the state budget.
In the meantime, it also allocated Rp14,1 trillion for a cash transfer program for some 19,1 million low-income families across the country. The assistance was meant to protect the poor from the impact of the fuel price increase.
Even though the government had raised fuel oil prices by an average of 28.7 percent in May, the world crude price continued to skyrocket until it reached its peak at US$147 a barrel in July that pushed up the amount of subsidy.
According to Evita Legowo, the government has pushed up the amount of subsidy for fuel oils. The realization of subsidized budget up to October this year has reached Rp130 trillion, exceeding the subsidy target set at the 2008 revised budget at Rp126 trillion.
Luckily, after reaching its peak in July, the world crude price began to decline.
After all, bubble of financial crisis exploded in the United States. In October, crude prices dropped to US$90 a barrel following fear that the financial crisis in the United States would spread to other countries even though the US government had provided a US$700 bailout package for collapsed financial institutions.
In that conditions, observers warned it may push down the crude prices to US$70 a barrel at the end of the year, cutting state revenues from oil by Rp30 trillion.
On October 6, the price of 'light-sweet' oil in main contract trading in New York had fallen to US$87.81 per barrel for November shipment, and in London, the price of "Brent North Sea" dropped to US$83.68 per barrel.
In line with declining prices of crude in the world market, pressures at home that the government should lower fuel oil prices mounted.
Thus, the government on December 1, 2008 decided to cut the price of subsidized premium gasoline by Rp500 from Rp6,000 per liter effective December 1, 2008, but maintained the price of diesel oil at least until December 31.
It has promised, however, to lower diesel oil price in January and considered cutting again that of premium gasoline. The rates have yet to be announced.
"The government will review fuel oil prices each month," Energy and Mineral Resources Minister Purnomo Yusgiantoro said. (T.A014/A/HAJM/17:20/a014) 13-12-2008 17:20:55
DESPITE DEFICIT, RP45 TRILLION OF BUDGETS REMAIN UNSPENT
By Andi Abdussalam
Jakarta, Dec 12 (ANTARA) - The steep decline in the world crude price from US$147 a barrel in July 2008 to below US$50 in December has cut the state budget deficit from Rp94.3 trillion in the 2008 revised state budget to about Rp50 to Rp70 trillion.
If only the government were able to predict the world crude price and calculate central and regional governments' expenditures realistically, it might not have to set a deficit in its 2008 budget.
Approaching the year end, it turns out that about Rp45 trillion of the regional budgets for all regions in Indonesia remain unspent. This is regretted by Finance Minister Sri Mulyani Indrawati.
"Many regions could not absorb the whole of their regional budgets (APBD) so that there are unspent budgets amounting to Rp45 trillion," the finance minister said when opening a "Fiscal Decentralization Policy 2008 Forum" at the Aston Atrium Hotel on Thursday.
In the revised 2008 state budget, the government had set the budget deficit at 2.1 percent of GDP or Rp94.3 trillion with state expenditures estimated at Rp989.3 trillion and state revenues and grants at Rp895 trillion.
The government estimates the deficit in the 2008 state budget will be lower than 1.9 percent of the country's gross domestic product (GDP) due in part to a recent drop in global crude prices.
Virtually, with the crude price drop, the amount of deficit in the state budget for 2008 should have been very small. After all, unspent budgets (SILPA) amount to Rp45 trillion.
Finance Minister Mulyani regretted the fact that the regional budgets were not absorbed maximally while there was a relatively big deficit in the state budget which reached Rp50 to Rp70 trillion.
"The deficit means expenditures exceed revenues. Some of the budgets for expenditures were transferred to the regions so that we hope the regions will use them maximally," the minister said.
Previously, the director general for financial balance of the Ministry of Finance, Mardiasmo estimated that the absorption of budgets transferred to the regions from the 2008 revised budget would reach 95 percent of the total funds of Rp292.4 trillion.
"We hope that with 95 percent, the absorption this year will increase from that last year, because the funds for Aceh special autonomous region for example has spent 100 percent, and now we are waiting for a report from Papua province on its spending. In the meantime the public allocation funds (DAU) have also been absorbed 100 percent," he said.
He said that the absorption realization of transferred funds to the regions up to December 9, 2008 had reached about 89 percent. The ceiling of transferred funds to the regions in the 2008 revised budget were recorded at Rp292.4 trillion, consisting of financial balance funds worth Rp278.44 trillion and special autonomous and adjustment funds amounting to Rp13.99 trillion.
The financial balance funds consisted of Rp179.51 trillion in DAU, Rp77.73 trillion in profit-sharing funds (DBH) and Rp21.20 trillion in special allocation fund scheme (DAK).
Mardiasmo said that the DAU funds had been distributed 100 percent to the regions, among others for the educational sector while the DBH funds were still waiting for disbursement.
Although the amount of unspent regional budgets reaches Rp45 trillion this year, the government has no plan to cut its expenditures next year. After all, it is expected that the impact of global financial crisis will begin to be felt in 2009.
"We are not going to cut the budget as we did last year. Cuts in spending will only be made as a last resort," the finance minister said.
She said budget cuts or changing the budgets of ministries / government institutions and the regions would only disturb the absorption of budgets in general.
"We fear that budget cuts will slow budget spending as has happened so far. So, unless absolutely necessary, we will not cut the budget," she added.
The minister said that new and effective programs were really needed to prevent layoffs or to create new job opportunities for laid off or new workers whose number continued to increase annually by about two million.
Mulyani said that the 2009 budget included various programs designed to anticipate layoffs, such as the smallholder's credit scheme (KUR) and the national program for people's empowerment (PNPM).
"Workers' layoffs are likely to happen. So, we have included KUR and PNPM programs in the state budget. We hope it will at least help if layoffs take place or create new job opportunities," the minister said.
She admitted that the inclusion of priority programs in the state budget for 2009 could cause a bigger deficit in the 2009 budget than those in 2008.
Citing an example, the minister mentioned the deficit in the revised 2008 budget which was set at 2.1 percent of Gross Domestic Product but its realization was predicted to be one percent only.
"From the receipt aspect, if the economic activities decline, the revenue target could also decline and thus it will automatically generate bigger deficit," she said. (T.A014/A/HAJM/19:45/a014) 12-12-2008 19:55:24
Jakarta, Dec 12 (ANTARA) - The steep decline in the world crude price from US$147 a barrel in July 2008 to below US$50 in December has cut the state budget deficit from Rp94.3 trillion in the 2008 revised state budget to about Rp50 to Rp70 trillion.
If only the government were able to predict the world crude price and calculate central and regional governments' expenditures realistically, it might not have to set a deficit in its 2008 budget.
Approaching the year end, it turns out that about Rp45 trillion of the regional budgets for all regions in Indonesia remain unspent. This is regretted by Finance Minister Sri Mulyani Indrawati.
"Many regions could not absorb the whole of their regional budgets (APBD) so that there are unspent budgets amounting to Rp45 trillion," the finance minister said when opening a "Fiscal Decentralization Policy 2008 Forum" at the Aston Atrium Hotel on Thursday.
In the revised 2008 state budget, the government had set the budget deficit at 2.1 percent of GDP or Rp94.3 trillion with state expenditures estimated at Rp989.3 trillion and state revenues and grants at Rp895 trillion.
The government estimates the deficit in the 2008 state budget will be lower than 1.9 percent of the country's gross domestic product (GDP) due in part to a recent drop in global crude prices.
Virtually, with the crude price drop, the amount of deficit in the state budget for 2008 should have been very small. After all, unspent budgets (SILPA) amount to Rp45 trillion.
Finance Minister Mulyani regretted the fact that the regional budgets were not absorbed maximally while there was a relatively big deficit in the state budget which reached Rp50 to Rp70 trillion.
"The deficit means expenditures exceed revenues. Some of the budgets for expenditures were transferred to the regions so that we hope the regions will use them maximally," the minister said.
Previously, the director general for financial balance of the Ministry of Finance, Mardiasmo estimated that the absorption of budgets transferred to the regions from the 2008 revised budget would reach 95 percent of the total funds of Rp292.4 trillion.
"We hope that with 95 percent, the absorption this year will increase from that last year, because the funds for Aceh special autonomous region for example has spent 100 percent, and now we are waiting for a report from Papua province on its spending. In the meantime the public allocation funds (DAU) have also been absorbed 100 percent," he said.
He said that the absorption realization of transferred funds to the regions up to December 9, 2008 had reached about 89 percent. The ceiling of transferred funds to the regions in the 2008 revised budget were recorded at Rp292.4 trillion, consisting of financial balance funds worth Rp278.44 trillion and special autonomous and adjustment funds amounting to Rp13.99 trillion.
The financial balance funds consisted of Rp179.51 trillion in DAU, Rp77.73 trillion in profit-sharing funds (DBH) and Rp21.20 trillion in special allocation fund scheme (DAK).
Mardiasmo said that the DAU funds had been distributed 100 percent to the regions, among others for the educational sector while the DBH funds were still waiting for disbursement.
Although the amount of unspent regional budgets reaches Rp45 trillion this year, the government has no plan to cut its expenditures next year. After all, it is expected that the impact of global financial crisis will begin to be felt in 2009.
"We are not going to cut the budget as we did last year. Cuts in spending will only be made as a last resort," the finance minister said.
She said budget cuts or changing the budgets of ministries / government institutions and the regions would only disturb the absorption of budgets in general.
"We fear that budget cuts will slow budget spending as has happened so far. So, unless absolutely necessary, we will not cut the budget," she added.
The minister said that new and effective programs were really needed to prevent layoffs or to create new job opportunities for laid off or new workers whose number continued to increase annually by about two million.
Mulyani said that the 2009 budget included various programs designed to anticipate layoffs, such as the smallholder's credit scheme (KUR) and the national program for people's empowerment (PNPM).
"Workers' layoffs are likely to happen. So, we have included KUR and PNPM programs in the state budget. We hope it will at least help if layoffs take place or create new job opportunities," the minister said.
She admitted that the inclusion of priority programs in the state budget for 2009 could cause a bigger deficit in the 2009 budget than those in 2008.
Citing an example, the minister mentioned the deficit in the revised 2008 budget which was set at 2.1 percent of Gross Domestic Product but its realization was predicted to be one percent only.
"From the receipt aspect, if the economic activities decline, the revenue target could also decline and thus it will automatically generate bigger deficit," she said. (T.A014/A/HAJM/19:45/a014) 12-12-2008 19:55:24
INDONESIA SUCURES RP9.3 TRILLION CORRUPTED ASSETS
By Andi Abdussalam
Jakarta, Dec 10 (ANTARA) - Since it launched an anti-graft movement in 2004, the Indonesian government has succeeded in safeguarding at least Rp9.3 trillion in state money.
Of the amount, about Rp5.4 trillion in the state assets have been recovered and have become legally binding based on court verdicts.
The success to recover corrupted state assets follows the establishment of the Corruption Eradication Commission (KPK) in 2004.
"Indonesia as a country ruled by law has placed itself in the forefront of the fight against corruption. On December 9, 2004, the government, through Presidential Instruction No 5/2004, ordered the entire United Indonesia cabinet to accelerate corruption eradication efforts," Attorney General Hendarman Supandji said on the occasion of the observance of the World Anti-Corruption Day on Tuesday.
Then, in 2005, a corruption eradication coordination team was set up as a follow up to the issuance of Presidential Instruction No.5/2004. "Within a period of three years (2005-2007), the team was able to settle 280 corruption cases and recover a total of Rp3,95 trillion worth of state assets," he said.
Meanwhile, President Susilo Bambang Yudhoyono, citing data from the Attorney General's Office, in the period 2004-November 2008, said that state assets and money saved from corruption cases totaled Rp859,762,538,773 through the Police, Rp8,001,138,805,489.17 through the prosecutor's offices, and Rp476,456,872,901 through the Corruption Eradication Commission.
State money that has been recovered based on court verdicts that had become legally binding totals Rp4,927,277,318,110.39 from cases handled by public prosecutor's offices and Rp476,456,872,901 from cases solved by the KPK.
According to the president, corruption in all its manifestations directly and indirectly harms the public interest and creates national problems that eventually damage the country's image.
The government is very serious about eradicating corruption and this is why it has issued Presidential Instruction No 5/2004 on acceleration of corruption eradication.
"By issuing the Presidential Instruction, we want to take concrete steps to fight corruption" President Yudhoyono said.
The head of state said corruption was a bad practice because it caused national assets and money to go down the drain, whereas they could actually be used to make the people prosperous.
Therefore, he called on law enforcers and other government authorities to watch eight government sectors prone to corruption and collusion. The eight sectors included the supply of goods and services, tax and excise, recruitment of civil servants and private employees.
The government in its efforts to prevent corruption has also applied an internal supervision system at governmental departments. In order to intensify the supervision, the KPK, however, is proposing a change in the system.
Corruption Eradication Commission chief Antasari Azhar said he was proposing to entrust supervision of government departments' or agencies' internal finances to personnel outside the departments or agencies concerned.
"Such internal supervisory positions as inspector general, or units like regional supervisory boards (Bawasda), internal supervision teams should be filled by personnel who do not belong to the departments or agencies concerned," he said.
The officials performing the departments' or agencies' internal supervision could be attached to a certain ministry to ensure more effective and objective supervision, he said
"The change is necessary to avoid a kind of conflict of interest," Azhar told the press on the sidelines of a function to observe World Anti-Corruption Day.
He said a successful supervision system was applied by China where supervision teams were grouped in a ministry like Indonesia's administrative reform ministry.
Meanwhile, Administrative Reform Minister Taufik Effendi admitted on the same occasion that there were many constraints in supervision performed by people who belonged to the government department or agency involved. Such insiders usually were reluctant to carry out their supervisory functions objectively.
In an effort to stay objective and help make the anti-graft drive a success, the governors of most of Indonesia's provinces pledged on Tuesday they would never commit any corruption. The written pledge was red by KPK Chairman Antasari Azhar.
In the written pledge, the governors stated that corruption was an extraordinary crime that violates the people's rights and was damaging the life of and hurting the people.
"Today, we, as representatives of the people of Indonesia, state we will never commit corruption," they said in their declaration.
The participation of the public, particularly students, in supervising officials so that they would not commit corruption is also very important. In this case rector of Paramadina University Anies Baswedan Phd appealed to all universities in Indonesia to require their students to take a lecture on anti-corruption.
"If only half of 4.1 million university students in Indonesia take an anti-corruption lecture I am convinced the rank of anti-corruption campaigners will increase significantly," he said in a statement.
Anies said the optimism that the nation was able to fight corruption should be bequeathed to the younger generation.
"Universities have a big role to play in developing this stance. We must not be influenced by the notion that corruption cannot be eradicated. That is not true," he said. (T.A014/A/HNG/A/S012) 10-12-2008 22:28:19
Jakarta, Dec 10 (ANTARA) - Since it launched an anti-graft movement in 2004, the Indonesian government has succeeded in safeguarding at least Rp9.3 trillion in state money.
Of the amount, about Rp5.4 trillion in the state assets have been recovered and have become legally binding based on court verdicts.
The success to recover corrupted state assets follows the establishment of the Corruption Eradication Commission (KPK) in 2004.
"Indonesia as a country ruled by law has placed itself in the forefront of the fight against corruption. On December 9, 2004, the government, through Presidential Instruction No 5/2004, ordered the entire United Indonesia cabinet to accelerate corruption eradication efforts," Attorney General Hendarman Supandji said on the occasion of the observance of the World Anti-Corruption Day on Tuesday.
Then, in 2005, a corruption eradication coordination team was set up as a follow up to the issuance of Presidential Instruction No.5/2004. "Within a period of three years (2005-2007), the team was able to settle 280 corruption cases and recover a total of Rp3,95 trillion worth of state assets," he said.
Meanwhile, President Susilo Bambang Yudhoyono, citing data from the Attorney General's Office, in the period 2004-November 2008, said that state assets and money saved from corruption cases totaled Rp859,762,538,773 through the Police, Rp8,001,138,805,489.17 through the prosecutor's offices, and Rp476,456,872,901 through the Corruption Eradication Commission.
State money that has been recovered based on court verdicts that had become legally binding totals Rp4,927,277,318,110.39 from cases handled by public prosecutor's offices and Rp476,456,872,901 from cases solved by the KPK.
According to the president, corruption in all its manifestations directly and indirectly harms the public interest and creates national problems that eventually damage the country's image.
The government is very serious about eradicating corruption and this is why it has issued Presidential Instruction No 5/2004 on acceleration of corruption eradication.
"By issuing the Presidential Instruction, we want to take concrete steps to fight corruption" President Yudhoyono said.
The head of state said corruption was a bad practice because it caused national assets and money to go down the drain, whereas they could actually be used to make the people prosperous.
Therefore, he called on law enforcers and other government authorities to watch eight government sectors prone to corruption and collusion. The eight sectors included the supply of goods and services, tax and excise, recruitment of civil servants and private employees.
The government in its efforts to prevent corruption has also applied an internal supervision system at governmental departments. In order to intensify the supervision, the KPK, however, is proposing a change in the system.
Corruption Eradication Commission chief Antasari Azhar said he was proposing to entrust supervision of government departments' or agencies' internal finances to personnel outside the departments or agencies concerned.
"Such internal supervisory positions as inspector general, or units like regional supervisory boards (Bawasda), internal supervision teams should be filled by personnel who do not belong to the departments or agencies concerned," he said.
The officials performing the departments' or agencies' internal supervision could be attached to a certain ministry to ensure more effective and objective supervision, he said
"The change is necessary to avoid a kind of conflict of interest," Azhar told the press on the sidelines of a function to observe World Anti-Corruption Day.
He said a successful supervision system was applied by China where supervision teams were grouped in a ministry like Indonesia's administrative reform ministry.
Meanwhile, Administrative Reform Minister Taufik Effendi admitted on the same occasion that there were many constraints in supervision performed by people who belonged to the government department or agency involved. Such insiders usually were reluctant to carry out their supervisory functions objectively.
In an effort to stay objective and help make the anti-graft drive a success, the governors of most of Indonesia's provinces pledged on Tuesday they would never commit any corruption. The written pledge was red by KPK Chairman Antasari Azhar.
In the written pledge, the governors stated that corruption was an extraordinary crime that violates the people's rights and was damaging the life of and hurting the people.
"Today, we, as representatives of the people of Indonesia, state we will never commit corruption," they said in their declaration.
The participation of the public, particularly students, in supervising officials so that they would not commit corruption is also very important. In this case rector of Paramadina University Anies Baswedan Phd appealed to all universities in Indonesia to require their students to take a lecture on anti-corruption.
"If only half of 4.1 million university students in Indonesia take an anti-corruption lecture I am convinced the rank of anti-corruption campaigners will increase significantly," he said in a statement.
Anies said the optimism that the nation was able to fight corruption should be bequeathed to the younger generation.
"Universities have a big role to play in developing this stance. We must not be influenced by the notion that corruption cannot be eradicated. That is not true," he said. (T.A014/A/HNG/A/S012) 10-12-2008 22:28:19
BIZMEN URGED BANKS TO LOWER INTEREST RATES
By Andi Abdussalam
Jakarta, Dec 6 (ANTARA) - Business circles in the country now expect commercial banks to lower the interest rates on their credits in order to help stimulate the real sector.
Businessmen voiced the expectation after Bank Indonesia (BI, the central bank) lowered its benchmark reference rate (locally known as BI Rate) by 25 basis points to 9.25 percent on Thursday, while commercial banks' interest rates still ranged at about 17 percent.
"The lowering of the BI Rate should be responded to by banks by also reducing their interest rates and repositioning their tight liquidity," MS Hidayat, chairman of the Indonesian Chamber of Commerce and Industry (Kadin), said at the weekend.
The cut in the BI Rate is a positive signal for businesses and banks that the central bank is now able to control inflation and the weakening of the rupiah against the US dollar.
BI's board of governors decided on Thursday to lower the benchmark interest rate by 25 basis points to 9.25 percent.
In order to stimulate the real sector, BI needs to continue to lower its rate by 25 basis points in stages until it reaches 8.5 percent in the first quarter of 2009.
The next important step is that banks need to slacken the tightness of their liquidity. This is important because it will eventually induce the real sector to move.
According to Bank BNI chief economist Toni Prasetiantono, a lowering of the central bank's benchmark rate will loosen up banks' liquidity and energize the real sector.
"The lowering of Bank Indonesia (BI)'s benchmark rate by 25 basis points to 9.25 percent is a good step to stimulate the real sector," he said.
He hoped that banks would also reduce their interest rates. "We hope they will cut their interest rates, though they need time before doing so for their debtors," he said.
The prediction that the rate of banks' non-performing loans would go down was also expected to encourage banks to channel their funds to debtors.
Based on BI data in September 2008, commercial banks' credit provision reached Rp1,246.15 trillion while at the same time they also collected third party funds amounting to Rp1,603.45 trillion.
Loan to deposit ratio (LDR) reached 77.72 percent or it declined from 79.02 percent in August 2008. The percentage of non-performing loans reached 3.32 percent.
Toni Prasetiantono said the fact that the inflation rate could be controlled had given the monetary authorities a chance to lower the BI Rate.
"Bank Indonesia was of the view that inflationary pressures began to slow down as well. It was responsive enough to voices made by parties outside the bank, and this is an encouraging one," he said.
The Central Bureau of Statistics (BPS) has announced that the on-month inflation in November 2008 was 0.12 percent. The November inflation was lower than that in October which stood at 0.45 percent.
The January-November 2008 inflation was recorded at 11.10 percent while the year-on-year inflation (November 2007 - November 2008) inflation stood at 11.68 percent.
Economic observer Edwin Sinaga, however, said the BI's move to lower its rate is unlikely capable of stimulating the real sector.
"The real sector has not yet moved due to the fact that bank interest rates are still high, namely 17 percent," Edwion Sinaga, who is also president director of PT Finance Corpindo, said here on Friday.
Sinaga said the BI Rate should all along have been lowered because the inflation rate had begun showing a downward trend followed by a decline in international commodity prices.
But it was still difficult to stimulate the real sector with Thursday's cut in the BI Rate. Therefore, he said, the cut in the BI Rate was expected to be followed by adjustments in the interest rates of commercial banks.
"The banks' interest rates at 17 percent is still considered high by the business world," he added.
Other economic observer Muhaimin Iqbal concurred with Sinaga's view. "The BI Rate cut by 25 basis points is comparable to a piece of candy which offers sweet taste for a few minutes only," Iqbal said.
He said that the BI Rate cut could only have small effect on both macro and micro economic development in the country. It would not directly improve the economy to a significant degree.
"The main problem is that the value of the rupiah remains too low against the US dollar," he added.
Therefore, according to Kadin chairman Hidayat, businesspeople are now not yet willing to make new investment but committed to continuing investment plans they had made previously.
"Investments in the gas, oil and other energy sectors are likely to go ahead until the middle of 2009 in line with previously made plans," he said.
He expressed hope that the government would soon realize its plan to provide stimuli for the development of the production sector.
"The government has to realize its plan to release funds to stimulate the real sector and the initiation of infrastructure projects," he said. **(T.A014/A/HAJM/A/S012) 07-12-2008 00:41:33
Jakarta, Dec 6 (ANTARA) - Business circles in the country now expect commercial banks to lower the interest rates on their credits in order to help stimulate the real sector.
Businessmen voiced the expectation after Bank Indonesia (BI, the central bank) lowered its benchmark reference rate (locally known as BI Rate) by 25 basis points to 9.25 percent on Thursday, while commercial banks' interest rates still ranged at about 17 percent.
"The lowering of the BI Rate should be responded to by banks by also reducing their interest rates and repositioning their tight liquidity," MS Hidayat, chairman of the Indonesian Chamber of Commerce and Industry (Kadin), said at the weekend.
The cut in the BI Rate is a positive signal for businesses and banks that the central bank is now able to control inflation and the weakening of the rupiah against the US dollar.
BI's board of governors decided on Thursday to lower the benchmark interest rate by 25 basis points to 9.25 percent.
In order to stimulate the real sector, BI needs to continue to lower its rate by 25 basis points in stages until it reaches 8.5 percent in the first quarter of 2009.
The next important step is that banks need to slacken the tightness of their liquidity. This is important because it will eventually induce the real sector to move.
According to Bank BNI chief economist Toni Prasetiantono, a lowering of the central bank's benchmark rate will loosen up banks' liquidity and energize the real sector.
"The lowering of Bank Indonesia (BI)'s benchmark rate by 25 basis points to 9.25 percent is a good step to stimulate the real sector," he said.
He hoped that banks would also reduce their interest rates. "We hope they will cut their interest rates, though they need time before doing so for their debtors," he said.
The prediction that the rate of banks' non-performing loans would go down was also expected to encourage banks to channel their funds to debtors.
Based on BI data in September 2008, commercial banks' credit provision reached Rp1,246.15 trillion while at the same time they also collected third party funds amounting to Rp1,603.45 trillion.
Loan to deposit ratio (LDR) reached 77.72 percent or it declined from 79.02 percent in August 2008. The percentage of non-performing loans reached 3.32 percent.
Toni Prasetiantono said the fact that the inflation rate could be controlled had given the monetary authorities a chance to lower the BI Rate.
"Bank Indonesia was of the view that inflationary pressures began to slow down as well. It was responsive enough to voices made by parties outside the bank, and this is an encouraging one," he said.
The Central Bureau of Statistics (BPS) has announced that the on-month inflation in November 2008 was 0.12 percent. The November inflation was lower than that in October which stood at 0.45 percent.
The January-November 2008 inflation was recorded at 11.10 percent while the year-on-year inflation (November 2007 - November 2008) inflation stood at 11.68 percent.
Economic observer Edwin Sinaga, however, said the BI's move to lower its rate is unlikely capable of stimulating the real sector.
"The real sector has not yet moved due to the fact that bank interest rates are still high, namely 17 percent," Edwion Sinaga, who is also president director of PT Finance Corpindo, said here on Friday.
Sinaga said the BI Rate should all along have been lowered because the inflation rate had begun showing a downward trend followed by a decline in international commodity prices.
But it was still difficult to stimulate the real sector with Thursday's cut in the BI Rate. Therefore, he said, the cut in the BI Rate was expected to be followed by adjustments in the interest rates of commercial banks.
"The banks' interest rates at 17 percent is still considered high by the business world," he added.
Other economic observer Muhaimin Iqbal concurred with Sinaga's view. "The BI Rate cut by 25 basis points is comparable to a piece of candy which offers sweet taste for a few minutes only," Iqbal said.
He said that the BI Rate cut could only have small effect on both macro and micro economic development in the country. It would not directly improve the economy to a significant degree.
"The main problem is that the value of the rupiah remains too low against the US dollar," he added.
Therefore, according to Kadin chairman Hidayat, businesspeople are now not yet willing to make new investment but committed to continuing investment plans they had made previously.
"Investments in the gas, oil and other energy sectors are likely to go ahead until the middle of 2009 in line with previously made plans," he said.
He expressed hope that the government would soon realize its plan to provide stimuli for the development of the production sector.
"The government has to realize its plan to release funds to stimulate the real sector and the initiation of infrastructure projects," he said. **(T.A014/A/HAJM/A/S012) 07-12-2008 00:41:33
GOVT EXPECTED TO CUT GASOLINE, DIESEL OIL IN JANUARY
By Andi Abdussalam
Jakarta, Dec 6 (ANTARA) - Amid calls for domestic fuel oil price cuts, the government is now considering the lowering next month of diesel oil and premium gasoline prices as part of its efforts to alleviate the people's burden and to stimulate the economy.
"We are still conducting an 'exercise' and making calculations to see if it is possible to again lower the price of premium or even diesel oil to reduce the industry's burden," President Susilo Bambang Yudhoyono said over the weekend.
The government cut subsidized premium gasoline by Rp500 to Rp5,500 per liter on December 1, and announced it was considering also to lower in January the price of diesel oil which was much consumed by industries and fishermen.
President Yudhoyono said after a meeting to evaluate the performance of the people's business credit scheme (KUR) at the Bank Rakyat Indonesia (BRI) building here on Friday that the finance minister, along with other ministers concerned was now making the calculations for a further reduction in the premium gasoline price.
Last Monday, the president said the government's intention to consider the possibility of lowering the diesel oil price was part of its efforts to alleviate the people's economic burden. "But the government must also take into account the state's financial capability," he added.
The government last month decided to cut the price of subsidized premium gasoline by Rp500 from Rp6,000 per liter effective December 1, 2008, but maintained the price of diesel oil.
House of Representatives (DPR) Speaker Agung Laksono when opening the House's Second Sitting last November 24, 2008, called on the government to consider lowering the price of diesel oil.
The House leader said the government's decision to lower the price of subsidized premium gasoline by Rp500 was a positive step but urged a recalculation of the Rp500 cut in the premium gasoline price because the world oil price was continuing to drop.
According to legislator Alvin Lie, the government should further lower the price of subsidized premium gasoline in January 2009 in accordance with the decline in the world crude price.
"With the world crude price at a range of about US$40 per barrel, the domestic price of subsidized premium gasoline should be lowered again next month," Alvin Lie of the House of Representatives (DPR)'s Commission VII (energy affairs), said.
He said the world crude price was now back to its level in the middle of 2005. "If the present price of crude holds or even drops further, the premium gasoline price at home could be returned to the level set before the October 2005 price hike," he added.
In response to calls by the House and the public, the government at the weekend said it was considering lowering the price of premium gasoline again, but added calculations should be made first.
According to the president, the government's move followed the continuing decline in the price of the world's crude oil. On December 4, 2008 the world's crude oil price was recorded at below US$44 per barrel.
The price of crude oil continued to decrease in the past four days in reaction to worsening global economic conditions and lower oil demand.
When announcing the decision to cut the price of gasoline by Rp500 effective on December 1, 2008 Finance Minister Sri Mulyani said the government would review its decision on the price of fuel oils every month to see if it was in line with developments in the world crude price.
Besides the price of premium gasoline, the government is also considering cutting the price of diesel oil. Energy and Mineral Resources Minister Purnomo Yusgiantoro said the government was studying the possibility of lowering the domestic diesel oil price.
According to House Speaker Agung Laksono, a cut in the diesel oil price would be good for low-income people and support their economic activities because diesel oil was widely used in public transportation and by fishermen.
Yet, the government had not fixed the amount of the reduction.
"To fix the amount of the reduction, the government will adjust it with the Indonesian Crude Price (ICP), the rate of exchange and tax component namely value added tax (PPN) and motor vehicles oil tax (PBBKB)," Minister Yusgiantoro said.
"We are not saying the diesel oil price will be reduced by Rp500-Rp1,000 per liter but we have to see if the price cut can be bigger. Anyway, there will be no problem if it is either smaller or bigger," he said.
The government would continue to evaluate the prices of premium gasoline, diesel oil, and kerosene. The premium gasoline price was reduced on December 1 from Rp6,000 to Rp5,500 per liter, but the diesel oil price is still being evaluated.
Last May, the government raised the premium gasoline price from Rp4,500 to Rp6,000 per liter but starting from December 1, 2008 it was reduced from Rp6,000 to Rp5,500 per liter.
A number or parties have said the cut in the premium gasoline price should be immediately followed by a diesel oil price cut on January 1, 2009 by around Rp500 or Rp300 per liter.
Following the Rp500 cut in the premium gasoline price on Monday, December 1, the Down-stream Oil and Gas Regulating Body (BPH Migas) predicted subsidized premium gasoline consumption in the country would increase by about 1-5 percent. (T.A014/A/HAJM/A/S012) 06-12-2008 22:30:40
Jakarta, Dec 6 (ANTARA) - Amid calls for domestic fuel oil price cuts, the government is now considering the lowering next month of diesel oil and premium gasoline prices as part of its efforts to alleviate the people's burden and to stimulate the economy.
"We are still conducting an 'exercise' and making calculations to see if it is possible to again lower the price of premium or even diesel oil to reduce the industry's burden," President Susilo Bambang Yudhoyono said over the weekend.
The government cut subsidized premium gasoline by Rp500 to Rp5,500 per liter on December 1, and announced it was considering also to lower in January the price of diesel oil which was much consumed by industries and fishermen.
President Yudhoyono said after a meeting to evaluate the performance of the people's business credit scheme (KUR) at the Bank Rakyat Indonesia (BRI) building here on Friday that the finance minister, along with other ministers concerned was now making the calculations for a further reduction in the premium gasoline price.
Last Monday, the president said the government's intention to consider the possibility of lowering the diesel oil price was part of its efforts to alleviate the people's economic burden. "But the government must also take into account the state's financial capability," he added.
The government last month decided to cut the price of subsidized premium gasoline by Rp500 from Rp6,000 per liter effective December 1, 2008, but maintained the price of diesel oil.
House of Representatives (DPR) Speaker Agung Laksono when opening the House's Second Sitting last November 24, 2008, called on the government to consider lowering the price of diesel oil.
The House leader said the government's decision to lower the price of subsidized premium gasoline by Rp500 was a positive step but urged a recalculation of the Rp500 cut in the premium gasoline price because the world oil price was continuing to drop.
According to legislator Alvin Lie, the government should further lower the price of subsidized premium gasoline in January 2009 in accordance with the decline in the world crude price.
"With the world crude price at a range of about US$40 per barrel, the domestic price of subsidized premium gasoline should be lowered again next month," Alvin Lie of the House of Representatives (DPR)'s Commission VII (energy affairs), said.
He said the world crude price was now back to its level in the middle of 2005. "If the present price of crude holds or even drops further, the premium gasoline price at home could be returned to the level set before the October 2005 price hike," he added.
In response to calls by the House and the public, the government at the weekend said it was considering lowering the price of premium gasoline again, but added calculations should be made first.
According to the president, the government's move followed the continuing decline in the price of the world's crude oil. On December 4, 2008 the world's crude oil price was recorded at below US$44 per barrel.
The price of crude oil continued to decrease in the past four days in reaction to worsening global economic conditions and lower oil demand.
When announcing the decision to cut the price of gasoline by Rp500 effective on December 1, 2008 Finance Minister Sri Mulyani said the government would review its decision on the price of fuel oils every month to see if it was in line with developments in the world crude price.
Besides the price of premium gasoline, the government is also considering cutting the price of diesel oil. Energy and Mineral Resources Minister Purnomo Yusgiantoro said the government was studying the possibility of lowering the domestic diesel oil price.
According to House Speaker Agung Laksono, a cut in the diesel oil price would be good for low-income people and support their economic activities because diesel oil was widely used in public transportation and by fishermen.
Yet, the government had not fixed the amount of the reduction.
"To fix the amount of the reduction, the government will adjust it with the Indonesian Crude Price (ICP), the rate of exchange and tax component namely value added tax (PPN) and motor vehicles oil tax (PBBKB)," Minister Yusgiantoro said.
"We are not saying the diesel oil price will be reduced by Rp500-Rp1,000 per liter but we have to see if the price cut can be bigger. Anyway, there will be no problem if it is either smaller or bigger," he said.
The government would continue to evaluate the prices of premium gasoline, diesel oil, and kerosene. The premium gasoline price was reduced on December 1 from Rp6,000 to Rp5,500 per liter, but the diesel oil price is still being evaluated.
Last May, the government raised the premium gasoline price from Rp4,500 to Rp6,000 per liter but starting from December 1, 2008 it was reduced from Rp6,000 to Rp5,500 per liter.
A number or parties have said the cut in the premium gasoline price should be immediately followed by a diesel oil price cut on January 1, 2009 by around Rp500 or Rp300 per liter.
Following the Rp500 cut in the premium gasoline price on Monday, December 1, the Down-stream Oil and Gas Regulating Body (BPH Migas) predicted subsidized premium gasoline consumption in the country would increase by about 1-5 percent. (T.A014/A/HAJM/A/S012) 06-12-2008 22:30:40
Langganan:
Postingan (Atom)