Govt won't increase fuel prices
Govt won't increase fuel prices
Rendi A. Witular, The Jakarta Post, Jakarta
The President has said the government will not increase domestic
fuel prices this year even though the state budget may suffer
from ballooning subsidy spending due to soaring global oil prices
and rising domestic demand.
President Susilo made his statement during an impromptu visit
to state oil and gas firm Pertamina's fuel depot in Plumpang,
North Jakarta, on Friday.
"Although the government has to shoulder the burden of huge
fuel subsidy spending this year, there is no plan whatsoever to raise
fuel prices again. The government will seek ways to ensure that
the increased subsidy spending will not derail the state budget,"
he said.
The government increased fuel prices by an average of 29
percent starting March 1 to cut the budget deficit. However, the
decision was widely criticized by the public as it led to
corresponding increases in the cost of transportation and food.
Susilo had said earlier that the government would have to
spend some Rp 110 trillion (US$10.2 billion) on fuel subsidies
this year, up from the Rp 78 trillion allocation already approved
by the House of Representatives.
Accompanied by Minister of Energy and Mineral Resources
Purnomo Yusgiantoro and Cabinet Secretary Sudi Silalahi during
his visit, Susilo ordered Pertamina president director Widya
Purnama -- who remains at the helm following a decision to this
effect by the firm's shareholders at its annual meeting last
Friday -- to ensure adequate domestic supplies to prevent fuel
shortage, and to crack down on fuel smuggling and adulteration.
Pertamina director for marketing Arie Soemarno said that as of
June 30, the company and law enforcers had investigated 38 cases
of illegal fuel trading worth over Rp 100 billion.
Susilo also urged Pertamina to alleviate public disquiet in
Medan, North Sumatra, arising out of fuel shortages resulting
from the hoarding of fuel by speculators following rumors to the
effect that the government would soon raise prices.
"Many rumors are circulating and these have been causing
public among members of the public, including in Medan. I call on
the public not to panic in the face of the current fuel shortages
as the government is trying to resolve them," he said.
According to Pertamina, there are five provinces currently
facing fuel shortages, compared to 10 provinces last month.
The firm said that fuel stocks were still only sufficient for
18 days, less than the perceived safe level of 22 days.