Government adds fuel to price increase list<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
Instead of chomping down headache tablets for those nursing New
\nYear's Day hangovers, Indonesians were forced to swallow a more
\nbitter pill in the form of sharp price increases dispensed by the
\ngovernment in a bid to lift the country out of its economic ills.<\/p>\n
Fuel price hikes of up to 22 percent, effective as of
\nThursday, were announced Wednesday.<\/p>\n
The announcement coincides with an average six percent
\nincrease in electricity tariffs and an average 15 percent rise in
\ntelephone rates.<\/p>\n
The price of premium gasoline was set at Rp 1,810 (about 20
\nU.S. cents) per liter from Rp 1,750, while automotive diesel
\nclimbed to Rp 1,890 from Rp 1,550.<\/p>\n
And the government's fuel ceiling prices, the maximum limit
\nprices can increase to in a year, have also been raised, meaning
\nprices, set each month, could continue to climb, depending on
\ninternational oil prices.<\/p>\n
Last year the government, aiming to reduce costly fuel
\nsubsidies provided to all but a few sectors, scrapped policy
\nwhich set the domestic price of fuel products at 75 percent of
\nmarket prices in Singapore.<\/p>\n
The ceiling price of premium gasoline was raised to Rp 2,100
\nper liter from Rp 1,750 in 2002. The floor price, the lowest
\nprices can drop, was set at Rp 1,650 from Rp 1,450.<\/p>\n
The floor and ceiling prices for automotive diesel were set
\nhigher at Rp 1,650 and Rp 2,100 respectively.<\/p>\n
Floor and ceiling prices for industrial diesel, bunker oil and
\nkerosene for industry were respectively set at Rp 1,600 and Rp
\n2,050; Rp 1,150 and Rp 1,600; Rp 1,800 and Rp 2,200.<\/p>\n
The government only slightly increased the price of kerosene
\nto Rp 700 per liter from Rp 600. The subsidy for this commodity
\nremains huge because it is widely used by low-income people.<\/p>\n
The government was forced to cut the subsidy because of the
\nnation's massive debt. The government also said the heavily
\nsubsidized fuel was being exploited by fuel smugglers.<\/p>\n
To counter criticism, the government said the income gained
\nfrom the subsidy cut would help finance welfare programs for the
\npoor.<\/p>\n
The hike in electricity charges is also in line with the
\nsubsidy cut strategy. Tariffs will increase 24 percent this year,
\nwith six percent increases every quarter.<\/p>\n
The Indonesian Consumer Foundation (YLKI) has criticized the
\nincreases, saying it will create serious economic hardship for
\nthe people.<\/p>\n
YLKI urged Indonesian's to protest.<\/p>\n
Economist Didik J. Rachbini said the government had unfairly
\nshifted the burden of the economic crisis to the people, who had
\nbeen unable to raise their incomes because the government had
\nfailed to spur economic growth.<\/p>\n
But economist Muhamad Ikhsan said that this year's price hikes
\nwere inevitable as they had been postponed several times.<\/p>\n
He played down the possible inflationary impact of the price
\nhikes, citing an example of a 6 percent to 24 percent electricity
\nprice increase two years ago that had only a small effect on
\ninflation.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-adds-fuel-to-price-increase-list-1447893297",
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"sponsor": "Okusi Associates",
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