The furel price rise dilemma

The furel price rise dilemma

From Koran Tempo

An Indonesian economic think tank has proposed that the
government postpone its plan to raise fuel oil prices until 2006,
because the increase would trigger price hikes as a psychological
consequence of the public reaction.

The government indeed faces a dilemma in its fuel oil price
policy-making. While state budget deficits necessitate subsidy
reductions, the follow-on effects of a fuel price rise will also
be grave.

Ordinary people will be considerably affected when producers
raise their selling prices due to higher production costs.
Increasing our oil output is not easy because it requires time-
consuming surveys and exploration.

The government can raise its revenue by optimizing its non-tax
income, which is estimated to be worth trillions of rupiah.
Meanwhile, less urgent expenditure should be suspended and the
wasting of budget funds prevented.

Indonesia's fuel prices are too low in comparison with those
in neighboring countries and their increase is inevitable. The
basic factors in our economic structure force us to increase
them.

RIZA
Jakarta