Kadin: Maintain cash flow management amid rising energy prices

Jakarta (ANTARA) - Indonesia’s Chamber of Commerce and Industry (Kadin) assesses that cash flow management and operational efficiency are crucial mitigation efforts for the business and industrial sectors amid rising energy commodity prices, including non-subsidised diesel fuel (BBM) and Liquefied Petroleum Gas (LPG).

“Mitigation measures will certainly involve savings, both in terms of tighter cash flow management and the use of non-subsidised BBM. Operational efficiency is one alternative to ensure survival,” said Vice Chairman of Kadin for Regional Autonomy, Sarman Simanjorang, when contacted in Jakarta on Monday.

Sarman views the increase in non-subsidised BBM and LPG prices as unavoidable at present, as they must align with global price rises.

He acknowledges that the surge in energy commodity prices affects operations and distribution across various industrial sectors and middle-class consumer purchasing power.

“For businesses, the impact is also felt by industries using non-subsidised diesel, such as manufacturing, hospitality, apartments, restaurants, malls and trading centres, logistics, mining, and SMEs. This increase adds to operational costs, including operational vehicles beyond trucks,” said Sarman.

Therefore, the business and industrial sectors have several recommendations for the government, which he deems important in responding to the current global economic dynamics.

“Our recommendations to the government are to maintain rupiah exchange rate stability to keep it below Rp17,000, and to ensure that the availability of BBM and LPG for national needs is guaranteed so there are no concerns of even larger increases,” said Sarman.

Additionally, he suggests that BBM prices should be quickly evaluated and reduced if world oil prices decline, and to consider providing incentives to business actors to prevent layoffs (PHK).

“The government can also offer relaxations or stimuli to business actors within the framework of enabling businesses to survive and avoid employee reductions or PHK,” he stated.

Previously, the government raised non-subsidised BBM prices such as Pertamax Turbo, Dexlite, and Pertamina Dex effective Saturday (18/4), due to adjustments to world oil prices and the war between Iran and the United States-Israel.

Not only that, the price of 12 kg non-subsidised LPG rose from Rp192,000 per cylinder to Rp228,000 per cylinder, an increase of 18.75 percent.