Raising fuel prices

Fuel oil subsidies will be removed from the 1998/1999 state budget. This is one of the points agreed upon by the Indonesian government and the International Monetary Fund as contained in the letter of intent signed by the President. One of its most important consequences -- as the public in general sees it -- is that fuel oil prices will soon increase.

An increase in fuel prices, as experience has taught us, is certain to raise the prices of many other commodities, including services, transportation services in particular. Given the present prevailing climate of sensitivity in our society and in the market, such a collective increase in prices is sure to worsen psychosocial and psychopolitical conditions amid the monetary crisis which is at present afflicting our people.

In such conditions, raising fuel prices can no longer be considered a purely economic measure, as it has the potential of turning into a serious political issue. Viewed in this context, the calls to implement these fuel price increases discriminatingly is relevant and important. As long as these measures are properly clarified, the public will naturally understand why the step has to be taken. However, the public's perception of that need could be minimal if prices should be raised beyond their level of tolerance.

Another matter that should be considered is proper timing. With Idul Fitri and the People's Consultative Assembly's general session approaching, the atmosphere is loaded with economic and political uncertainty. In such a climate, taking unpopular -- even though necessary -- policy measures is obviously risky. The government, therefore, should be patient and await a more appropriate and risk-free moment before raising fuel oil prices.

-- Republika, Jakarta