Fri, 09 Nov 2007
JAKARTA (JP): Hit by rising oil prices, many factory-gate prices will have to rise by up to 10 percent early next year unless the government can reduce its chronic red tape so as to bring down the cost ofdoing business, says an association.

According to Sofyan Wanandi, chairman of the Indonesian Employers Association (Apindo), firms would be forced to increase prices as a result of increasing production and logistics costs.

"The key to facing this situation lies in the effort to reduce the high costs caused by red tape so that the pressure from higher oil prices can be reduced," Sofyan said Thursday.

He said that at a recent meeting of association members, industry players estimated that the total cost of doing business would likely go up by 10 percent starting next month, making higher product prices inevitable.

For November, state oil company PT Pertamina has increased the price of diesel oil for industrial use by 6.4 percent to Rp 4,776 (52 U.S. cents) a liter from Rp 4,489 a liter last month. (Andi Haswidi)



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