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)