Prices rise over fuel price hike fears
Bambang Nurbianto, The Jakarta Post, Jakarta
While the fuel price increase is still a plan, the prices of basic commodities here have already gone up, with rice, sugar and palm oil taking the lead.
Traders in several traditional markets in the capital said on Tuesday that the prices of basic commodities had increased steadily since President Susilo Bambang Yudhoyono announced his plan to gradually cut the fuel subsidy starting October.
"The increase is not so high, but it occurs steadily on a daily basis," said Armani, 31, a trader in Kebayoran Lama market, South Jakarta.
He said that prices of basic commodities in the market had risen by up to 30 percent. The price of sugar, for example, has gone up from Rp 5,000 per kilogram to Rp 6,000, medium-quality rice from Rp 2,700 to Rp 3,000, high quality rice Rp 3,500 to Rp 4,500, palm oil from 4,800 to Rp 5,500 per liter and wheat flour from Rp 3,700 to 3,900 per kilogram.
The prices of branded products such as instant noodles, palm oil and various canned foods, however, have not increased.
Echa, another trader in Kebayoran Baru, said many producers have informed them about plans to increase the prices of their products.
"The producers of branded palm oil, instant noodles and canned foods have told me about their plans to increase prices. They said that they would announce the increase soon after the government increases the fuel prices," he added.
The government announced last week that it would raise fuel prices in early October in order to reduce the fuel subsidy and reduce the burden on the country's budget.
He said that the rising prices of basic commodities did not only affect residents, but traders as well.
He said that the turnover of his two shops reached some Rp 15 million per day before the news of the fuel price increase broke, but now it had dropped to only some Rp 10 million per day.
"The market is quieter now because the purchasing power of residents here has also declined," he said.
Several traders in Kebon Jati market, Tanah Abang, Central Jakarta made similar statements about the price increases.
"We were forced to increase the prices last week because agents have also increased their prices," said Riswandi, 32, a trader in Kebon Jati, Tanah Abang, Central Jakarta.
"The increase in the price of basic commodities will be unavoidable when the government announces the fuel price increase before Idul Fitri," said Riswandi, 32, a trader in Kebon Jati market.
He expressed the hope that the government would not increase the fuel price drastically because it would cause a drastic increase in the prices of basic commodities.
"The current increase in the prices of basic commodities has reduced the number of people coming to the market. If the price of fuel increases to over Rp 5,000, the prices of commodities would increase by up to 50 percent," he said.
The current price of gasoline is Rp 2,400 per liter and if the government revokes the subsidy completely, the price would rise to around Rp 5,600 a liter.