Mixed reaction over fuel price
JAKARTA (JP): Several legislators of the three largest factions of the House of Representatives gave mixed reactions on Monday to the government's proposal to raise fuel prices by 30 percent next year.
Husni Thamrin of the second largest faction, Golkar, said the government should delay the plan given the hardships people suffer due to the prolonged economic crisis.
"I personally don't agree with the plan to hike fuel prices next year given the people's financial condition. It will add to the burdens of the poor," Husni told the Jakarta Post.
Another Golkar legislator, Paskah Suzetta, who is also deputy chief of House Commission IX, which will debate the government's draft budget, proposed fuel price increases be postponed until 2003 for the same reason.
President Megawati Soekarnoputri unveiled her 2002 state budget proposal -- her first budget proposal since she assumed power in July -- which includes a plan to raise fuel prices by 30 percent and electricity rates by between 3 percent and 4 percent every quarter.
Megawati said the government would reduce the fuel subsidy to Rp 32.29 trillion (US$3.5 billion) in 2002 from the Rp 53.77 trillion allocated for the current fiscal year to help plug the budget deficit.
Despite the fuel and electricity price increases, the 2002 budget proposed by the government will still have a deficit of Rp 45.3 trillion.
The 2002 budget also set the country's oil and gas revenue at Rp 66.1 trillion against the Rp 100.95 trillion target in the current budget, and the average oil price at $22 per barrel as against $24 under the current budget
The plan to raise fuel prices came at the request of the International Monetary Fund (IMF), which has argued that the fuel subsidy was mostly enjoyed by factories, the wealthy and smugglers, rather than the poor.
Zulfan Lindan of the Indonesian Democratic Party of Struggle (PDI Perjuangan) said the fuel price increase was understandable as the government had no choice in its attempt to plug the budget deficit.
"But since the House and the government have yet to debate the plan and the budget proposal, I can't for now say whether to endorse the plan or not," Zulfan said.
Syamsul Balda from the Reform faction, the third largest, also called on the government to delay increasing fuel prices, warning that the move could spark social unrest.
"I agree with the government's plan to cut the fuel subsidy, but it should wait for the right the time to do so," Syamsul told the Post, adding it was only his personal view.
He charged that about 70 percent of the fuel subsidy had been so far enjoyed by the business sector, with only 10 percent going to the poor.