Poor brace for impact of price hike

Damar Harsanto and Anissa S. Febrina, The Jakarta Post, Jakarta

Last weekend was not a pleasant one for Robinson Sirait. "I am sorry to have to say this, but I ask for your understanding on the fare. You know, with the fuel price hike and all," the taxi driver said as a passenger got in.

"I lost Rp 50,000 yesterday because we were using the old fare even though fuel prices had gone up."

If Rp 70,000 used to be enough to cover his daily fuel expenses, now Robinson has to spend Rp 128,000 for gas.

Most taxi drivers in the capital are dealing with the same problem since Oct. 1, when the government raised the price of Premium gasoline 87.5 percent. Taxi companies have not yet decided if, or by how much, they will raise their fares.

With an average daily income ranging from Rp 300,000 to Rp 400,000, most taxi drivers have to pay the company Rp 200,000 for the use of the can.

"We usually take home Rp 50,000 after fuel and meal expenses," Robinson said.

With a wife and two school-age children to support, Robinson only took home Rp 12,500 on Saturday.

Taxi companies are still debating whether to raise their fares, said Bubung Burhana, director of the taxi division at the Jakarta branch of the Organization of Land Transportation Owners (Organda DKI).

Bubung told The Jakarta Post on Saturday that taxi operators that provided gasoline for their drivers were pressing for a fare increase, while taxi firms whose drivers bought their own gas favored maintaining the current fares.

"Some taxi operators are against any increase, arguing that a fare hike will hurt their business by reducing the number of people using taxis," he said.

To date, only the Blue Bird group subsidizes the fuel expenses for its 9,000 taxi cabs.

The Blue Bird Group said on Saturday it was pressing for a fare increase.

"It would be naive of us to deny we will suffer from the fuel price hike. But the final say is in the hands of Organda, and we will go with their decision," Blue Bird Group spokesman Riza Lazuardi told the Post.

The price of Premium gasoline, used by most of 26,000 city taxis, was increased from Rp 2,400 to Rp 4,500 per liter.

Fuel accounts for 20 percent of the total costs of transportation operators, including taxi companies.

Taxi drivers are not the only ones who will feel the pinch of the higher fuel prices. With the prices of basic commodities expected to climb, most households will be affected.

"The transportation cost from Kramat Jati wholesale market in East Jakarta has gone up from Rp 80,000 to Rp 125,000," said Warti Effendi, a trader at Mayestik market in South Jakarta.

She said she had no choice but raise the prices of her goods by between 20 percent and 50 percent, and bear with the complaints of her customers.

With the fasting month beginning in a couple of days, she expects her sales to drop. "We cannot compete with the hypermarkets in terms of prices."

For those people who use kerosene, the fuel price hike will be a heavy burden. "We cannot buy kerosene for Rp 2,000 a liter, which is supposed to be the price. The distributors are selling kerosene for Rp 3,000 a liter," said a customer in front of Warti's stall.

Despite the fact that kerosene is used mainly by people at the lower end of the economic ladder, the price of the fuel was raised by 187.5 percent, the highest increase for any fuel.