Govt to raise fuel prices before Idul Fitri
Govt to raise fuel prices before Idul Fitri
Rendi A. Witular, The Jakarta Post, Jakarta
It may not be the kind of Idul Fitri present most Indonesians
would wish for, but the government has confirmed it will raise
fuel prices in early October prior to annual celebration.
The decision to increase fuel prices -- in a bid to cut the
costly fuel subsidy that could exceed US$10 billion this year --
was delivered by State Secretary Yusril Ihza Mahendra on Monday
after a video-conference Cabinet meeting jointly led by President
Susilo Bambang Yudhoyono from St. Louis, Missouri, the United
States, and Vice President Jusuf Kalla in Jakarta.
There were no details on the exact date of the fuel price
increase or by how much prices will go up.
"We have not come up with a definite date for the rise, but we
will definitely be preparing for that in early October," said
Yusril.
The increase, should it be executed, is a bold political move
for Susilo, particularly given the timing. Muslims will start the
fasting month of Ramadhan on Oct. 5 and celebrate Idul Fitri on
Nov. 3 and Nov. 4.
During the month, many Indonesians will spend more on food and
goods. With all prices likely to rise along with the fuel prices,
there is the possibility for demonstrations and unrest.
The government's decision to raise fuel prices during the
fasting month could indicate a more credible social safety net
has been set up to protect the poorest members of society from
the higher prices.
The government announced on Friday it would give out Rp
100,000 (about $10) in cash per month to 15.5 million families,
or around 64 million people, living on or below the poverty line
in order to provide them some protection from the fuel price
increase.
The government will disburse some Rp 4.8 trillion in direct
compensation this year.
During the meeting, Susilo instructed Kalla to coordinate the
completion of the low-income assistance fund, as well as to
ensure a similar compensation fund allocated during the fuel
price hike last March reached those in need.
"I do not want poor people who are eligible for the fund not
to receive it because the money has instead gone to state
officials' families who are not poor," Susilo said as quoted by
Antara. "This must not happen."
The earlier compensation fund is distributed as an indirect
subsidy in the education, health and rural infrastructure
sectors.
Susilo also instructed Coordinating Minister for the Economy
Aburizal Bakrie to coordinate with Minister of Transportation
Hatta Radjasa and Minister of Trade Mari Elka Pangestu to ensure
the availability of staple foods and public transportation in the
wake of the fuel price hike.
Minister of Manpower and Transmigration Fahmi Idris was told
to anticipate mass layoffs as a result of the hike.