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)