Kuntoro foresees no price rises for fuel, power
Kuntoro foresees no price rises for fuel, power
JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto promised on Friday that the government would not
increase prices of most fuel products on the domestic market
during the coming 1999/2000 fiscal year.
Kuntoro also said he did not expect that the government would
have to increase electricity tariffs in 1999/2000 either.
"With fuel subsidies for the 1999/2000 budget amounting to Rp
10 trillion (US$1.3 billion), the government is very unlikely to
raise fuel prices," he said at a weekly press conference.
The government has allocated Rp 27.5 trillion in fuel
subsidies for the current fiscal year.
He said the government would lift subsidies for jet fuels
later this month, but would maintain those on widely-used
products such as gasoline, kerosene and diesel fuel.
The government initially increased fuel prices by up to 71.34
percent last year and power prices by 20 percent in mid-year as a
condition of being granted bailout loans from the International
Monetary Fund.
But, the price increases incited riots in several big cities,
including the capital of Jakarta, forcing the government to
review them. Those riots led to the resignation of President
Soeharto after 32 years in power.
The government expected revenue from oil and gas operations to
drop by 57.8 percent to Rp 21 trillion for the 1999/2000 fiscal
year from Rp 49.7 trillion in the current fiscal year following
the slump in oil prices.
The government projected oil prices to average $10.5 per
barrel in the next fiscal year, down from the average $12.4 per
barrel in the current fiscal year.
Kuntoro said the government did not expect oil prices to
further fall this year in view of the mounting awareness among
oil producers of cooperation in improving oil prices.
"Oil producers -- both members of the Organization of
Petroleum Exporting Countries (OPEC) and non-OPEC members -- have
interests in correcting the current prices," Kuntoro said.
He said foreign analysts predict oil prices would improve to
between $12 and $16 this year.
Kuntoro, however, did not give any explanation of his
prediction that the electricity tariff would not increase in the
next fiscal year.
Nevertheless, he said earlier the government planned to raise
electricity tariffs for households with a power consumption of
over 6,000 watts.
Meanwhile, state-owned electricity firm PT Perusahaan Listrik
Negara (PLN) has just reported a net loss of at least Rp 5.9
trillion for last year because its operating costs exceeded its
income. (jsk)