Lay economist's view of fuel subsidy cut

Lay economist's view of fuel subsidy cut

From Kompas

While many people seem to believe that "Fuel subsidies are enjoyed by the rich", I think that these subsidies (for gasoline and diesel) are instead enjoyed by most poor Indonesians, directly or otherwise.

If the government goes through with its plan to cut fuel subsidies, the poor will suffer. Many of them will have to pay more for gasoline for their motorcycles. Daily necessities will rise in price because transportation costs will also increase.

The rich will not mind an increase in fuel prices as they can afford it, but not the poor.

The government must carefully compare the proceeds from the resulting subsidy cut and the sufferings of the poor because of these hikes.

It is a sad irony that Indonesians have to face oil-related problems, while the country is supposedly rich in oil deposits. Tighter controls must be exercised to prevent oil from being smuggled abroad.

YOESTINUS SUSILO Magelang, Central Java