Power, ful prices to go up on same day
JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto said yesterday the government would raise fuel and electricity prices concurrently.
But he refused to reveal when the price increase would be announced.
"Under the preliminary plan, the government will increase fuel and electricity prices simultaneously, but I don't know when (the announcement will be made)," he said.
Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita had earlier said the government would raise fuel prices this month and electricity prices next month.
According to Kuntoro informal talks involving the ministry and the House of Representatives on the planned price increases were in progress.
Thus far, he said, he could not hold a formal hearing with the House because its members were in recess.
Kuntoro acknowledged the price increases would be a hardship for the public, but the government had no other choice in order to reduce its spending.
He said that if fuel and electricity prices were not increased, the government's subsidies for both commodities would reach Rp 27 trillion, or US$4.5 billion, broken down between Rp 11 trillion for electricity and Rp 16 trillion for fuel.
Kuntoro attributed the huge subsidies to the sharp fall of the rupiah against the dollar, rather than the inefficient operations of the state electricity company PLN and the state oil and gas company Pertamina.
He said operations of both were relatively efficient.
"As the minister of mines and energy, I have the task of making the companies efficient and preventing their inefficiency from contributing to the fuel and electricity price increases," he said.
The price rises were expected to increase the country's inflation rate, but he refused to specify the estimated inflation rate.
"By comparison, when the government last raised fuel prices in January 1993, the country's monthly inflation rate after the increase in fuel prices rose to 2.3 percent, from 1.5 percent in the preceding month," he said. (jsk)