Minister plays down impact of fuel price hike
JAKARTA (JP): New Coordinating Minister for the Economy Burhanuddin Abdullah played down the impact of the fuel price hike despite mass media reports describing significant price increases of many commodities throughout the country.
Citing Minister of Industry and Trade Luhut Panjaitan's report to Cabinet, Burhanuddin pointed out that the price of many essentials, like vegetables and fruit, had declined in various places, especially in Sumatra and Java.
"As reported by Pak Luhut, the impact of the fuel price hike is not very big, or, in another words, has only slightly affected prices," Burhanuddin said after attending a Cabinet meeting at Bina Graha presidential office.
Vice President Megawati Soekarnoputri did not attend the meeting and did not send her official secretary Bambang Kesowo to represent her.
Burhanuddin blamed red tape and illegal levies collected by hoodlums and Ministry of Communications officials as the main cause of price increases. He said truck drivers were forced to pay more on the streets and at the ports of Merak and Bakuheni, which connect Java and Sumatra.
"In Bakuheni, the drivers have to wait for two days to be ferried if they do not pay the scalpers," Burhanuddin explained.
The Cabinet meeting discussed the allocation of Rp 2.2 trillion as compensation for the impact of the fuel hike. The funds would be channeled to health and education, the procurement of low-cost clean water, the subsidization of city transportation and other related needs.
The Cabinet's main concern was developing strategies to protect poor people from the impact of price increases by providing subsidies for generic medicines and vaccinations, Burhanuddin said.
Meanwhile, Minister of Health and Social Welfare Achmad Suyudi said some Rp 337.6 billion of the total Rp 534.1 billion subsidy directed to the ministry would be distributed to all state-run hospitals and certain private hospitals, in addition to the state's subsidy facilitating access to medication for the poor.
"Hospitals have allocated 30 percent of their profits to cover the medical expenses of the poor each year. The government's social safety net can only recover half of the expenses. These additional funds would be very helpful," he said.
The ministry allocated Rp 32.4 billion for its free Hepatitis B vaccination program for more than 906,000 babies from poor families through public health centers.
Separately, businessman Fadel Muhammad, deputy chairman of the Chamber of Commerce and Trade (Kadin), warned that many industries would go bankrupt because their products had become less competitive as a result of increasing costs.
"The fuel price hike has caused many controversies and raised our operating costs," said Fadel.
Meanwhile, in Cirebon, West Java, the price of daily commodities, including eggs and rice have risen by approximately 30 percent. The price of Ramos-type rice increased from Rp 2,200 to Rp 2,800.
In Serui, Irian Jaya, the price of chili sharply increased from Rp 20,000 to Rp 30,000.
In Makassar, South Sulawesi, prices are relatively stable. Antara reported that the price of potatoes had risen by Rp 200 to Rp 3,200.
The Central Sulawesi Legislative Council demanded local authorities launch a market operation to stabilize prices, especially the price of basic goods.
"The market operation must be conducted to prevent violent reactions by the people," deputy provincial speaker Muchlis Agung said.
Meanwhile, in Maumere, East Nusa Tenggara, the fuel price hike has not yet influenced the prices of foodstuffs in the area. Some residents also commented that they were not affected by the new fuel prices.
"What we expect now is a peaceful atmosphere so that we can earn money to feed our families," local resident Maria Imakulata told The Jakarta Post on Thursday.(bby/yac/prb)