House rejects fuel price increase

JAKARTA (JP): Leaders of the House of Representatives rejected yesterday the government's decision to increase prices of fuel and electricity, saying the timing was inappropriate.

Deputy speaker Syarwan Hamid said a meeting of the House leadership yesterday endorsed the stance taken by its Commission V last week, calling on the government to roll back the hikes.

The leaders were briefed by representatives of Commission V, which held a contentious hearing with Minister of Mines and Energy Kuntoro Mangkusubroto on Friday to discuss the price increases.

"We can't accept the government's decision," Syarwan said of the two presidential decrees that hiked fuel prices by between 25 percent and 71 percent, and electricity by 20 percent last week.

The House hoped to hold another meeting with the government soon, involving more members of the cabinet, to bridge the differences with the government on the issue, he said.

Syarwan said the House hoped for "fairer" rates of increase which would not be too burdensome on the people already hit by the economic crisis.

In the proposed expanded meeting with the government, the House hoped to receive more detailed explanations of the government's financial position and calculations of oil prices than those given by Kuntoro, he added.

In last week's meeting, members of Commission V -- overseeing industry, mining, trade, manpower, cooperatives and the environment -- attacked the government's decision to phase out about Rp 16 trillion in fuel subsidies when it had only recently forked out more than Rp 100 trillion to bail out several insolvent banks.

Kuntoro had responded that subsidy was a political decision and beyond his power to explain.

He proposed an expanded meeting, involving other members of the cabinet, to help clarify matter.

President Soeharto on Saturday defended the hikes and pointed out that the funds used to bail out banks were loans. He said they would be repaid and should not be compared with the subsidy. (emb)