Government delays fuel price hike

JAKARTA (JP): The government abruptly delayed on Thursday the planned fuel price hike a day before it was due to come into effect, saying it had to weigh further the political, social and security implications which might arise.

The decision was announced by Minister of Energy and Mineral Resources Purnomo Yusgiantoro, after an economic meeting chaired by Vice President Megawati Soekarnoputri at Merdeka Selatan Palace.

No indication was given about how long the fuel price hike would be delayed.

"We have not discussed a specific date because there are various phases which need to be passed," Purnomo said.

Purnomo said Coordinating Minister for Political, Social and Security Affairs Agum Gumelar would chair an inter-ministerial meeting on Friday to discuss in-depth the impact of the fuel price hike.

Recently dismissed minister of finance Prijadi Praptosuhardjo last week received approval from the House of Representatives to raise fuel prices by an average of 30 percent.

Electricity rates will also rise by an average of 17.47 percent early next month.

In a bid to maintain the 2001 state budget deficit at a safe level of about 3.8 percent of gross domestic product, the government had proposed to the House a cut in the fuel subsidy from Rp 66 trillion to Rp 60 trillion, by means of the 30 percent hike.

Ironically, the government's decision to raise fuel prices at the time also followed an economic meeting chaired by Megawati.

There were fears that the fuel price hike would have galvanized public discontent at a time when massive, and sometimes violent, labor demonstrations were already affecting major cities across the country.

The combination of these two major sources of unrest would have rocked further President Abdurrahman Wahid's fragile administration.

Separately, Finance Minister Rizal Ramli suggested that the delay was not indicative of a cancellation of the planned price hike, and that it would still go ahead in the near future.

Rizal contended that ministers in charge of the country's social and security situation needed to make the final assessment before the fuel price increase policy was implemented.

"This is normal standard operating procedure for every fuel price increase," Rizal claimed.

However, he did not explain why such an assessment had not been planned earlier.

Meanwhile, the head of the House's state budget task force Benny Pasaribu said the House would be disappointed if the plan were delayed, as it showed that the government had not been properly prepared when it had initially proposed the policy.

Legislator Alvin Lie of the National Mandate Party, and a member of the task force, suggested that this was an "attempt to discredit Megawati."

But Rizal said that the decision to make a final assessment came from Megawati herself.

Queue

Police were already on alert on Thursday in preparation for possible unrest, as they guarded gas stations and other vital fuel installations.

Jakarta Police chief Insp. Gen. Sofyan Yacob said he had stationed his men at 17 riot-prone areas of the capital, such as Glodok and Pasar Baru.

Jakarta Governor Sutiyoso disclosed that 5,020 police personnel and 18,000 military soldiers had also been deployed to safeguard the city.

The situation however was relatively clam.

Long lines of motorists were seen queuing at several gas stations before news spread that the fuel price hike had been delayed.

Until Thursday afternoon, gas stations at Mampang, Jl Sudirman and Pejompongan in South Jakarta were packed with vehicles, the drivers of which were hoping to fill their gas tanks.

A private individual named Aris said that he had driven to several gas stations, only to find long queues of cars everywhere.

"I've been to Grogol (West Jakarta) and Pluit (North Jakarta) but both were completely packed. Then I came here to Pejompongan, but it's also full," he told The Jakarta Post.

Meanwhile, at kerosene kiosks, such as the ones in Pejompongan, and nearby Kemanggisan and Palmerah Barat, no queues were seen and supplies flowed as usual.

In Semarang and Purwokerto, Central Java, Surabaya, Denpasar, Medan, Balikpapan in East Kalimantan, and Palu in Central Sulawesi, people also rushed to gas stations.

"We are a major oil producer, but we can't enjoy the benefit of cheap fuel," Daryono, a bus driver, complained in Semarang.

Minor rallies to protest the fuel hike were observed in Semarang, Medan, and Jambi. (45/har/hdn/rei/prb)