Minister plays down impact of fuel price hike

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)