Batam businesspeople up in arms over profiteering

Fadli, The Jakarta Post/Batam

Tired with profiteering by distributors of sugar and cooking oil, Batam businesspeople have written to President Susilo Bambang Yudhoyono requesting him to dispatch a special team to help resolve the problem.

The businesspeople, grouped in the Indonesian Business Association, also requested the President to take resolute action against distributors who set the prices of sugar and cooking oil too high at the expense of the consumer.

They accused relevant government offices of doing nothing.

The association revealed that the price spiral had started in early 2005 with the implementation of a new distribution system for nine basic commodities. This gave rise to monopolies, they said, with sugar and cooking oil being controlled by only four distributors.

The association accused the four distributors of hoarding, thus causing shortages and higher prices.

The association said that before the introduction of the distribution system, the price of sugar was around Rp 3,000 per kilogram, but it was now up to Rp 7,000 per kilogram. Meanwhile, cooking oil, which was earlier being sold at Rp 5,000 per kilogram, now cost Rp 7,000 per kilogram.

The price increases, according to the association, were not caused by higher operating costs, but rather hoarding facilitated by the distribution monopolies.

"We're really worried with the way the distributors have been behaving as they are responsible for causing higher living costs on Batam. Our employees have felt the impact of their actions and we want the President to take strict action," Abidin, chairman of the association in Riau Islands province, told The Jakarta Post.

He said the letter had been sent on Oct. 20, but the association had received no response from the President so far.

The decision to send the letter, he said, came following a meeting of 60 businesspeople in the province.

Similar requests had earlier been conveyed to the Trade and Industry Office in Batam city, as well as to the Batam mayor, the police and the governor -- all to no avail.

"We actually suspect that the relevant offices are in cahoots with the distributors to drive up prices. That's unacceptable and we hope the government can do something to help," Abidin said.

More effective price controls were essential, he said, as the high cost of living in Batam might affect the minimum wage, which was still under discussion.

According to a survey by the All-Indonesian Workers Union and the manpower office in Batam city, a worker in Batam now needs Rp 1,059,000 per month just to survive. This figure is based on the prices of basic necessities, mainly foodstuffs, in the markets.

Meanwhile, the director of the Trade and Industry Office in Batam city, Ahmad Hijazi, denied the accusations by the businesspeople, saying they were groundless.

He said the supply of sugar and cooking oil on the island was normal and the increase in prices were triggered by the fuel price hikes.

He said the city needed up to 4,000 tones of sugar and 3,500 tones of cooking oil per month.