Govt cuts fuel prices after weeks of protests<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
The government announced on Monday a reduction in fuel prices and
\ndiscounts for certain electricity users following weeks of
\nnationwide protests over the recent fuel and utility price hikes.<\/p>\n
\"The government today has set new prices for fuel to come into
\neffect on Jan. 21 at midnight,\" Coordinating Minister for the
\nEconomy Dorodjatun Kuntjoro-Jakti told a press conference
\nfollowing a cabinet meeting.<\/p>\n
The price of automotive diesel is to be cut to Rp 1,650 per
\nliter from the previous price of Rp 1,890 per liter, while the
\nprice of industrial diesel is reduced to Rp 1,650 from Rp 1,860.
\nThe price of heavily subsidized kerosene for industrial use is
\nlowered slightly to Rp 1,800 from Rp 1,970.<\/p>\n
The price of other fuel products, including premium gasoline
\nand kerosene for domestic, stay the same.<\/p>\n
\"The new price for domestic oil products will be effective as
\nlong as world oil prices remain high,\" Dorodjatun said, pointing
\nto an apparently impending U.S. attack on Iraq, and the situation
\nin the Middle East and Venezuela as causes of uncertainty in the
\ninternational oil market.<\/p>\n
As a result of the price cut for industrial diesel, which is
\nthe primary source of energy used by state-owned electricity
\ncompany PLN, the utility company would provide a monthly 2.5
\npercent discount for its customers in the business and industrial
\ncategories. The company would also provide incentives for
\nhousehold customers with capacities of 900 VA to use energy-
\nsaving light bulbs.<\/p>\n
The government earlier this month decided to raise domestic
\nfuel prices by between 3 percent and 22 percent, electricity
\nprices by 6 percent every quarter, and telephone charges by an
\naverage of 15 percent to reduce costly subsidies and help ailing
\nstate-owned utilities.<\/p>\n
But the simultaneous price increases angered both businesses,
\nworkers and other people, triggering weeks of protest. Some have
\neven called on President Megawati Soekarnoputri and Vice
\nPresident Hamzah Haz to step down.<\/p>\n
Ex-authoritarian president Soeharto was forced to step down in
\n1998 due to widespread protests and riots that were partly
\ntriggered by an earlier fuel price hike decision.<\/p>\n
The protests had prompted the government earlier to delay the
\nincreases in phone charges.<\/p>\n
A number of organizations plan to continue their anti-
\ngovernment protests despite the fuel price reductions, saying
\nthat they wanted a clean government.<\/p>\n
President Megawati has been strongly criticized over a
\ndecision to free former bank owners, heavily indebted to the
\nstate, from the possibility of prosecution for banking crimes
\ncommitted in the past.<\/p>\n
The country's international donors grouped in the Consultative
\nGroup on Indonesia (CGI), which convenes for a two-day meeting on
\nTuesday in the resort island of Bali to decide on fresh loans for
\nthe country, may not be happy with the price cut decision.<\/p>\n
The International Monetary Fund has long insisted the
\ngovernment eliminate expensive subsidies on fuel and electricity
\nto create a sound fiscal management. Heavily subsidized fuel is
\nseen as benefiting rich car owners and big business.<\/p>\n
Indeed, the reduction in the prices of industrial diesel and
\nelectricity for industry seems to be a result of lobbying by the
\ninfluential business groups that have been protesting the early
\nJanuary utility price hikes.<\/p>\n
The government is trying to play down the impact of the new
\npolicy on the 2003 state budget.<\/p>\n
Dorodjatun said that although the cost of the price reductions
\nwould be about Rp 1 trillion per month, it would not affect the
\nbudget deficit target as the government had extra money from the
\ncontingency fund, which was originally intended for emergencies.<\/p>\n
The government would latter replenish the funds with the
\nwindfall profits from oil sales after obtaining the approval of
\nthe House of Representatives.<\/p>\n
Photo -- Page 13<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-cuts-fuel-prices-after-weeks-of-protests-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }