Govt to introduce fuel coupons for buses

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)