Government's plan to increase fuel price sparks concerns
Government's plan to increase fuel price sparks concerns
JAKARTA (JP): Representatives of transport organizations here
over the weekend expressed concern at the government's plan to
increase fuel prices in April, saying that companies were now in
a dilemma over whether or not to raise transportation fares.
Many expressed their anxiety at the increased operational
costs the fuel hike would incur on the one hand, while companies
could not summarily raise their fares (and thereby deter
passengers) on the other.
Chairman of the Association of Land Transportation Owners
(Organda) G.T. Soerbakti said the increase would burden current
high operational expenditure of many bus companies.
"The government needs to evaluate the consequences (of the
fuel hike). Some public transportation has already increased its
tariffs lately," Soerbakti told The Jakarta Post.
Currently there are 5,441 full-sized buses and 4,981 medium-
sized buses operating in the capital. Most are above 10-years-
old.
Soerbakti remarked that the added operational costs would
further limit bus companies' ability to modernize their fleet.
Separately the head of Organda's taxi division, Izak A.
Rumaedi, expressed fears that passengers will cease to use taxis
if fares are increased further to cover the higher operational
cost.
Twenty-four taxi companies already imposed a 45.45 percent
hike in November on the flagfall and initial kilometer fare.
"Another taxi tariff hike will jolt passengers," told Izak to
The Jakarta Post.
Eight taxi companies in the city -- PT Citra Taxi, PT Steady
Safe, PT Kosti Jaya, PT Koperasi Taksi, PT Sri Medali, PT Queen
Taxi, PT Kartika Taxi and PT Gamya of Blue Bird Taxi Group --
however have continued to use the old fares.
Izak told the Post that many taxi companies usually burden
fuel expenses on the drivers.
"Another fuel hike followed by the possibility of a tariff
hike will also burden the drivers," he asserted.
According to Izak each taxi consumes at least 900 liters of
premium gasoline, or about Rp 1.03 million, every month.
Currently 22,000 cabs in the capital are operated by the 32
companies.
Izak further revealed that Organda is planning to purchase
2,000 new vehicles from South Korea which can be run on natural
gas.
"We plan to complete the purchase of a total of 20,000 new
cars to replace our aging vehicles by the end of 2001. This will
help taxi companies as the price of natural gas is lower compared
with other fuels," said Izak.
Furthermore, Izak added, "We don't have to worry about another
fuel hike next year."
Currently liquid natural gas costs Rp 840 per liter, compared
to premium which is sold at Rp 1,150 per liter.
Spokesman for the state-owned bus company PPD, Suryadi, also
claimed that the company was already in financial problems due to
the oversized workforce and growing number of aging vehicles and
a fuel hike would only worsen the problem.
"Currently, we are awaiting government subsidies to pay our
5,600 employees. Another fuel hike will just add more burdens to
the company," said Suryadi.
Out of its monthly expenditure of Rp 3.5 billion, the company
spends at least Rp 1 billion on gasoline for its operational
fleet of 454 buses.
Minister of Transportation and Telecommunication Agum Gumelar
earlier said that any fuel price hike would not necessarily lead
to increased fares.
Agum argued that fuel expenditure only amounted to a portion
of the overall fare calculation.
The secretary to the Ministry's office, Anwar Supridjadi, on
Friday boasted that the increased funds acquired from cutting the
fuel subsidy would be used to improve passenger services in
public transportation.
"Furthermore, it will encourage residents to use public
transportation instead of private vehicles," Anwar claimed as
quoted by Antara. (07)