Govt to introduce fuel coupons for buses

JAKARTA (JP): The government may introduce fuel coupons for public buses to spare the operators, and therefore the public, from the planned increase in fuel prices next year.

Minister of Mines and Energy Susilo Bambang Yudhoyono told reporters he was still studying ways of protecting the poor from fuel price increases as the government tries to cut the huge subsidy bill in next year's budget.

Speaking after a seminar on the impact of autonomy on the economy, Bambang said he was looking at three proposals on how to protect the public transport sector.

One will be to distribute coupons for bus operators, while the second scheme will allow operators to claim a refund on the money spent on fuel. The third is to differentiate private cars from public transportation vehicles at fuel stations.

He also suggested kerosene should be exempted from the price hikes because the fuel was still widely used by small households.

The government is currently negotiating with various parties, including the International Monetary Fund and the House of Representatives, on the size and the timing of the increase in fuel prices as it drafts the new budget for April 2000-December 2000.

Fuel subsidies are estimated to have cost the government some Rp 27 trillion ($3.8 billion) in the fiscal year ending March 31.

Bambang said his office had proposed an average increase of 20 percent to be effected after April 1.

He said this would translate to Rp 1,100 (15.7 US cent) a liter for premium gasoline, up from Rp 1,000, and Rp 720 (10.2 US cents) for diesel oil, from Rp 550.

"The government is open to debate on how great the increase would be and when to apply it," he said.

The House of Representatives' leadership had even suggested postponing any increases until 2001, while the business community said they should be introduced in June, he said.

The IMF, which is providing massive loans to the government, earlier suggested prices be raised in January.

Bambang said the government welcomed more suggestions that would allow it to make a more balanced decision. "Five months will be enough for communicating this idea to the public," he said.

Meanwhile, state oil and gas company Pertamina announced on Wednesday its fuel production at the refinery in Cilacap, Central Java, would soon rise by 16 percent.

The increase has been made possible with the completion of the de-bottlenecking project in the Processing Unit IV, Husni Banser, the spokesman for the Cilacap refinery facility, said.

With the project in place, the refinery could process up to 348,000 barrels of crude oil per day, he said.(03/45)