Fuel Prices Unchanged, Indef: Maintains Economic Stability and Purchasing Power
Jakarta (ANTARA) - The Institute for Development of Economics and Finance (Indef) states that the government’s decision not to increase fuel prices amid the global crisis will have a positive impact on the economy, particularly in maintaining stability and public purchasing power.
Indef Executive Director Esther Sri Astuti, when contacted by ANTARA in Jakarta on Tuesday, said the policy is able to curb inflation, especially in the essential needs and transportation sectors, which are highly sensitive to energy price changes.
According to Esther, with stable fuel prices, pressure on the public can be minimised, which helps maintain purchasing power and ensures economic activities continue steadily.
“Public purchasing power is preserved because inflation is contained, particularly for essentials and transportation,” she said.
In addition, this policy also affects social conditions. According to her, without a fuel price increase, the potential for public panic or social unrest can be avoided.
“Preventing panic in society and potential social disruptions due to fuel price hikes,” she stated.
However, she reminded that this policy still faces long-term challenges. One of them is the potential increase in the burden on the state revenue and expenditure budget (APBN).
Moreover, subsidy distribution is also seen as potentially not targeted properly, as middle- to upper-class groups with private vehicles are considered to benefit more from subsidies than those who truly need them.
From the energy consumption perspective, relatively cheap fuel prices can also encourage excessive use of fossil fuels, making it inefficient and risky for energy sustainability.
To minimise these negative impacts, Esther suggested that the government improve the subsidy scheme to make it more targeted.
One option that can be implemented is limiting subsidies based on vehicle engine capacity (cc) or prioritising subsidies only for public transportation.
“Refocus budget allocation for productive and broad programmes,” she said.
Previously, State Secretary Minister (Mensesneg) Prasetyo Hadi stated that the government ensures that fuel prices, both subsidised and non-subsidised, will not increase.
Prasetyo said the decision was taken after the government coordinated with the Ministry of Energy and Mineral Resources (ESDM) and PT Pertamina, in line with President Prabowo Subianto’s directives.
“The President always prioritises the interests of the people and society in making decisions. Therefore, Pertamina has stated that it will not adjust prices for either subsidised or non-subsidised fuel,” said Prasetyo.
The government also ensures that national fuel supplies are safe and available, so the public is asked not to panic or worry about rumours of price increases.
“We hope this statement provides clearer, more accurate information to the public, and we hope people do not need to panic or worry because we guarantee fuel availability. We guarantee it, and there will be no price adjustments,” he explained.
The government hopes this clarification can provide accurate information to the public while quelling concerns over the circulating rumours of fuel price hikes.