Business slows after fuel prices hike
Apriadi Gunawan, The Jakarta Post/Medan
A shop owner, Asmah, jumped up from her seat upon seeing a customer walking past her clothing store in Petisah market in Medan.
"What do you want to buy? Please have a look," she exclaimed to the potential customer while hurriedly showing her the latest collection of Arabic-style clothing that many Muslims enjoy wearing during the holidays.
The customer, Arniwati Azhar, took the bait and started checking out the store. "I want a gamis style Arabic dress," she said, referring to a long dress with a skirt.
She tried on several pieces and negotiated for the one that she liked most.
"That dress cost Rp 250,000 (US$25) and the quality is good," said Asmah. After a quick haggling session, the dress exchanged hands for Rp 180,000.
The mother of two hoped that her business would pick up the rest of the day. Since the tenth day of Ramadhan, business had slowed, she said, unlike last year when business was good for most of the month.
Asmah blamed the slowdown on people's weaker purchasing power following the government's move to increase fuel prices on Oct. 1 by an average of 126.6 percent, which have served to push up inflation on other commodities across the board.
"Last year, at this time, people were already busy buying new dresses, but this year it's really slow. Maybe because of the fuel price increases," she told The Jakarta Post on Wednesday.
Prices of clothing have increased following the new fuel prices, including Asmah's shop.
"I have to raise prices because all other prices are on the rise," said Asmah, who buys her merchandise from Tanah Abang market in Central Jakarta. Most dealers have claimed operational costs are up due to the increase of transportation costs.
The skyrocketing prices of basic necessities, including clothes, have forced some housewives to tighten their collective family belts.
Typically, during Idul Fitri, Muslims get together with relatives and most people want to show off some new clothes. Murni, a housewife, said this year she could only afford to buy her four children one set of new clothes each.
"Last year, I bought my children two sets of new clothes each, but this year they only get one. What can I do, my husband's salary as a civil servant has remained the same, but all the prices are on the rise," said Murni while shopping at Petisah market.
The head of the North Sumatra Trade Office, T. Azwar Azis, said on Wednesday that consumer purchasing power was down by 20 percent to 30 percent this year since the new fuel prices. He added that the weaker buying power included almost all trade sectors.
"Lower purchasing power following fuel price increases has forced several companies, like glass and iron sheeting businesses, in the province to close down because high production costs are not compatible with their earnings," he said.