Fuel prices must not increase amid crisis: Analysts<\/p>\n
JAKARTA (JP): Analysts urged the government yesterday not to
\nraise fuel prices until the current monetary crisis was over to
\nprevent the country's economy from worsening.<\/p>\n
Two observers, former minister of mines and energy Subroto and
\nformer legislator Tadjuddin Noor Said, told The Jakarta Post that
\nfuel price stability at present would help the general public
\ncope with the financial crisis, although the government would
\nhave to spend greatly on fuel subsidies.<\/p>\n
\"An increase in fuel prices at the moment would only worsen
\nthe pains being suffered by the public,\" Tadjuddin said.<\/p>\n
Subroto agreed that higher fuel prices amid the monetary
\ncrisis would only shock the public and would make things worse.<\/p>\n
Both commented on President Soeharto's speech before the House
\nof Representatives on the country's budget proposal for fiscal
\n1998\/1999 on Tuesday.<\/p>\n
Soeharto said the government would allocate Rp 10.1 trillion
\ntoward fuel oil price subsidies, but hinted that the government
\nwould raise fuel prices to reduce the \"extremely large\"
\nsubsidies.<\/p>\n
\"At some time, it will be unavoidable that the price of fuel
\nwill be raised to reflect its economic value,\" Soeharto said. He
\ndid not say when the fuel prices would be raised.<\/p>\n
Indonesia depends partly on imported fuel since refineries
\nowned by state oil and gas company Pertamina cannot meet domestic
\ndemand. It also imports certain kinds of crude oil to feed
\nPertamina's refineries.<\/p>\n
The country used 50.2 million kiloliters of fuel during fiscal
\n1996\/1997, of which 22.7 percent, or 11.4 million kiloliters, was
\nimported.<\/p>\n
Fuel prices were raised in 1993 under a presidential decree to
\nbetween Rp 240 and Rp 420 per liter.<\/p>\n
Soeharto said the low fuel prices did not encourage people to
\nuse fuel economically nor stimulate the development of
\nalternative energies.<\/p>\n
The low price had even caused fuel smuggling, he said.<\/p>\n
Subroto said the government could raise fuel prices on several
\nconditions, including when the monetary situation stabilized and
\nthe inflation rate was reduced to less than 10 percent.<\/p>\n
He predicted monetary stability would take place by the end of
\nthe next fiscal year in March 1999.<\/p>\n
Subroto said if the government decided to raise fuel prices,
\nthe price of fuel most used by ordinary people, kerosene, should
\nbe raised the least of all to prevent a widespread impact.<\/p>\n
\"The government has to carefully study the composition of
\ndomestic fuel consumption before raising fuel prices,\" Subroto
\nsaid.<\/p>\n
Subroto criticized the government's way of raising fuel prices
\nin the past as \"causing a lot of shock\".<\/p>\n
The government usually announced a fuel price increase late at
\nnight to prevent people from hoarding fuel beforehand, he said.<\/p>\n
He proposed an alternative method in which fuel prices would
\nbe adjusted gradually without causing much surprise or shock.<\/p>\n
Fuel prices should be adjusted according to several variables,
\nincluding inflation, the rupiah's rate against the dollar and
\ninternational oil prices, he said.<\/p>\n
\"This method has been applied to some public utilities,
\nincluding electricity,\" he said. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/fuel-prices-must-not-increase-amid-crisis-analysts-1447893297",
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