Govt given one week to reassess fuel, power hikes<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
A day after an agreement to delay the telephone charge increase,
\nthe House of Representatives gave one week to the government to
\nreassess the hikes in fuel and power prices.<\/p>\n
"One week is enough for the government to recalculate the
\nincreases in fuel and electricity charges," House Speaker Akbar
\nTandjung told reporters after delivering a speech during a
\nceremony marking the Golkar Party's 38th anniversary in Bandung,
\nWest Java, on Thursday.<\/p>\n
He signaled, however, that the reassessment of the fuel and
\npower price hikes had to work out in such a way that there must
\nnot be a reduction in the increases. He said: "The government
\nmust consider the impact of any reduction on the 2003 state
\nbudget and the compensation funds paid as a result of the
\nabolition of the fuel subsidies," he said.<\/p>\n
On Wednesday, the House and the government agreed to delay the
\nhike in telephone charges until the end of this year and let the
\ngovernment reassess the increases in fuel and power prices in
\nresponse to the nationwide protests held against the increases in
\nutility prices.<\/p>\n
Taking effect on Jan. 1, fuel prices were raised by up to 22
\npercent and electricity prices increased by an average of 6
\npercent, while telephone charges were raised by an average of 16
\npercent, all of which led to significant increases in other
\nprices.<\/p>\n
The protests staged by farmers, bus drivers, fishermen, non-
\ngovernmental organizations and students became national in scale
\nas the government's initially refused to back down.<\/p>\n
The protesters claimed the hikes were too burdensome on the
\npoor.<\/p>\n
Separately, during a limited Cabinet meeting on Thursday,
\nPresident Megawati Soekarnoputri gave her approval to the
\nproposed reviews of the fuel and power price increases.<\/p>\n
"We will make adjustments especially to the fuel and
\nelectricity hikes without changing the assumptions underlying the
\n2003 State Budget," Coordinating Minister for the Economy
\nDorodjatun Kuntjoro-Jakti said after the meeting.<\/p>\n
The minister further said that the meeting to determine the
\nadjustments would be held on Friday.<\/p>\n
Separately, Minister of Energy and Maneral Resources Purnomo
\nYusgiantoro has asked state-owned oil and gas firm Pertamina and
\npower utility PT PLN to calculate possible reductions in fuel and
\npower prices.<\/p>\n
Sources in Pertamina said that for fuel, it would be possible
\nto cut around 15 percent of the current prices, but that this
\ncould not be applied to all types of fuel.<\/p>\n
Coordinating Minister for Social Welfare Jusuf Kalla said that
\nmaking adjustments to the price hikes was only one of several
\noptions, but the government had to calculate the capacity of the
\nstate budget to cover the additional expenditure required.<\/p>\n
"We need to see which revenue allocations can be revised so as
\nto compensate for the reduction of the prices of the two
\ncommodities.<\/p>\n
"But, the most important thing is that we do not review the
\n2003 State Budget, and that is why several adjustments will have
\nto be made," he added.<\/p>\n
Meanwhile, legislator Alvin Lie of the Reform Faction and
\nDidik J. Rachbini of the Institute for the Development of
\nEconomics and Finance (Indef) criticized Wednesday's agreement to
\nonly postpone the hike in telephone charges, saying the policy
\nonly temporarily relieved the people's anger.<\/p>\n
"It's just a consolation for the people, but it does not solve
\nthe key problem, the utility price hike" Didik said.<\/p>\n
He said it would be wise if the government were to meet the
\npeople's demands as the people were not able to improve their
\nincomes and their purchasing power.<\/p>\n
If the government agreed to delay all utility price hikes,
\nDidik said, it could set higher tax revenue targets to help
\nfinance the state budget by increasing the number of taxpayers.<\/p>\n
He also said the government should end its dependence on
\nforeign loans to finance the state budget and national
\ndevelopment programs.<\/p>",
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