Government undecided over fuel price increase

Government undecided over fuel price increase

JAKARTA (JP): The government is undecided on whether to
increase fuel prices in April this year as planned in the 2001
state budget, a minister said on Wednesday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said his office had prepared a proposal for the fuel hike but it
still needed the approval of the Cabinet and the House of
Representatives.

He said the Cabinet would hold a meeting next week to discuss
the proposal.

"We have completed the proposal and prepared everything (for
the fuel hike), but it is not yet final. There are still other
aspects to be considered," he said after a ceremony to install
new first echelon officials at the ministry here.

Purnomo said the government should also consider the possible
social and political consequences of the policy in deciding to
raise fuel prices.

The 2001 state budget projects fuel prices to be increased by
20 percent in April this year.

The government decided to reduce the fuel subsidy by gradually
increasing the prices as part of an agreement with the
International Monetary Fund which is providing a multibillion
dollar bailout package to help revive Indonesia's ailing economy.

In October last year, the government increased fuel prices by
an average of 12 percent after a delay in April due to public
protests.

The increase reduced the fuel subsidy by Rp 800 billion (US$
84.2 million).

Increasing fuel prices had always been a sensitive issue in
Indonesia, whose citizens are still struggling to cope with the
lingering economic crisis.

In 1998, when the crisis reached its peak, the government's
decision to raise fuel prices resulted in mass protests, which
contributed to the downfall of former president Soeharto.

Restructuring

Purnomo installed on Wednesday eight new senior officials for
the ministry as part of the restructuring of the ministry's
organization.

The eight officials were appointed through two presidential
decrees, respectively signed by President Abdurrahman Wahid and
Vice President Megawati Soekarnoputri.

The ministry's directorate general of mining has been merged
with the directorate general of geology and mineral resources
following the implementation of Law No. 22/1999 on regional
autonomy, which transfers the role of managing mining industry
from the ministry to the regions.

Former director general of mining Surna Tjahja Djajadingrat
was appointed head of the ministry's education and training
center, while Felix Simon Sembiring, who is in charge of
supervising mining investors in the directorate, was promoted to
become head of the ministry's research and development center.

Djoko Darmono was reappointed as secretary-general, while
Rachmat Sudibjo was renamed the director general of oil and gas.

Surjantoro, former director general of geology and mineral
resources, has become coordinator of the minister's expert staff,
while Endro Utomo Notodisuryo, former director general of
electricity and energy development, has been named inspector
general.

Luluk Sumiarso took over from Endro as director general of
electricity and energy utilization, while Wimpy S. Tjetjep
replaced Surjantoro as director general of geology and mineral
resources. (tnt)