Raising fuel prices

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