House says no to fuel price hike
House says no to fuel price hike
JAKARTA (JP): All four factions at the House of
Representatives urged the government yesterday not to raise fuel
prices to protect the public's interests.
Most analysts have predicted that domestic fuel and
electricity prices will have to be raised to enable the
government to achieve a budget surplus equivalent to 1 percent of
the gross domestic product, as required by the International
Monetary Fund.
The factions also submitted to Minister of Finance Mar'ie
Muhammad their proposal that the 1998/1999 state budget starting
in April be set at between Rp 110 trillion (US$31.4 billion) and
Rp 116 trillion, up from Rp 101.08 trillion in the current fiscal
year.
Yesterday was the last day of a three-day working session of
House Commission VIII for state budget and finance to discuss
latest economic developments and preparations for next year's
budget.
At the conclusion of the meeting, the House commission said it
fully supported the government's measures, as explained by
Mar'ie, already taken or to be taken to cope with the financial
turmoil.
The House members also expressed full support of the
government's decision not to help, directly or indirectly, bail
out private sector foreign debt totaling $65 billion.
All the factions underlined the need for the government to
maintain fuel subsidies in the next fiscal year to reduce the
burden on people who are now suffering from the brunt of the
financial crisis.
"Given the current economic situation, the Golkar faction asks
the government not to raise fuel prices because such a measure
would only burden our national economy even more," the Golkar
faction's spokeswoman Mubha Kahar Muang said.
She contended that the current economic downturn and the
weakening rupiah would result in a higher inflation rate which
might be as high as 9 percent in 1998/1999.
Minister of Finance Mar'ie Muhammad said earlier that the
government was subsidizing domestic fuel oil use because costs
had risen due to the steep depreciation of the rupiah.
Spokesman for the United Development Party (PPP) faction
Muchsin also suggested that the government maintain its fuel
subsidies because the government received extra earnings from
crude oil taxes generated by the higher-than-estimated oil prices
in the international market.
Supriadi, the spokesman for the Armed Forces faction,
concurred, arguing that "there is no need to raise fuel prices in
the near future".
The spokesman for the minority Indonesian Democratic Party
(PDI) faction, Nicolaus Daryanto, said the government should
consider all aspects, including political implications, in
raising fuel prices.
Mubha also cautioned the government not to change the base
price of electricity.
State-owned electricity firm PT PLN said earlier this week
that it had proposed to the government an increase in the base
rate of electricity set in 1994.
The government has allowed PLN to adjust its prices quarterly
according to the inflation rate and other costs, but any increase
should be based on the 1994 rates.
But Minister of Mines and Energy I.B. Sudjana said yesterday
that there was not any plan to raise the base price of
electricity, at least until the convening of the People's
Consultative Assembly in March.
"The decision to raise electricity rates should be a final
option," Sudjana said.
The ruling Golkar faction proposed to balance the 1998/1999
budget at Rp 110.9 trillion, the Armed Forces faction at Rp
113.35 trillion and the PPP faction at Rp 115.7 trillion. The PDI
faction did not give any budget figure. (rid)
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