Govt may raise fuel price

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana said yesterday the government may raise domestic fuel prices to reduce the government's subsidy.

"The rupiah's sharp depreciation against the U.S. dollar has inflated the subsidy value, therefore making it hard for us," Sudjana said.

He said it was therefore necessary to increase fuel prices, especially diesel oil, to reduce the government's subsidy in domestic fuel sales.

He said the government might consider increasing the price of some fuel and maintaining or increasing the subsidy on others.

"I think diesel fuel's price may be raised, because industry uses a lot of diesel," he said.

"We'll just see what's happens, but the government will take the best measure for the people."

In a statement delivered to the parliament's plenary session last week, Minister of Finance Mar'ie Muhammad said the state budget was under pressure because of the increase in the fuel subsidy which had resulted from the decline in the rupiah's value. (das)