Govt Urged To Announce Fuel Price Hike Soon

News Focus - GOVT URGED TO ANNOUNCE FUEL PRICE HIKE SOON by Andi Abdussalam Jakarta, April 30 (Antara) - Calls are mounting for the government to stop discourse but announce subsidized fuel price increase soon so that it would not confuse the public and lead speculators to hoard fuel stocks. "The government should announce soon subsidized fuel price hike. It should not leave it in the discourse too long," Komaidi Notonegoro, an energy observer of the ReforMiner Institute, said on Monday. He said that the government`s plan to raise subsidized premium gasoline and diesel oil prices should not remain only as a discourse but be realized soon. All quarters have expressed opinions and put forward their opinions. So, the government should decide and announce it immediately. Komaidi said that all options available must have advantage and disadvantage, so that what the government needed now was firmness in its implementation. The discourse on subsidized fuel price hike has been raised without a decision since 2008. "The important thing is that the government is firm and consistent with its decision so that the public would not be confused and its credibility would not be tarnished," he said. Observers also see that the government has been too late in taking a decision to increase the price of subsidized fuel oil prices. "The government has lost his fiscal momentum to raise subsidized fuel prices. It would be better if it raised the price three years ago or after the new president was inaugurated," Elfindri, an economic expert from Andalas University said meanwhile. He added, if the fuel price hike policy was implemented in the past, Indonesia could have built useful infrastructure such as the trans-Sumatra high-way and others. He said that the government should announce fuel price hikes soon to avoid fuel hoarding. "Besides preventing fuel hoarding, the step to raise fuel subsidized prices will also save the state budget," he said. According to Hayono Isman, chairman of Kosgoro, a mass organization affiliated with the Golkar Party, the government should therefore provide clear, correct and comprehensive explanations for the people regarding its plan to raise gasoline and diesel oil prices. "It is the people who will feel the burden so that they have the right to know it," Hayono said adding that the explanations should be complete and acceptable to the people. He said that the government`s reason to cut fuel subsidy because consumption would exceed the given quota was not enough. "The government should provide a logical reason. If it gives a correct reason and explains its benefit in other sectors, I am confident the people would accept it," Hayono said. According to Hayono, who is also a member of Commission I of the House of Representatives (DPR), if the government failed to provide correct and appropriate explanations and did not satisfy the people, it could create social unrest, including bad impacts on the general elections which would be held next year. This is because, according to Hayono, price increase of subsidized fuels will put burden on the people where basic necessities and other commodity prices will also increase. "It will trigger price increases of basic necessities. Therefore, it has risks and could disturb efforts to carry out reforms. After all we are facing a legislative election and a presidential race in 2014," he said. The government is aware of the impact of raising fuel oil prices. It needs time to consider various aspects before it comes to a final decision. But it has planned to announce it in the near future. "The people should be patient. I have no doubts (about the plan to raise fuel oil prices) but the government needs time to formulate protection for middle and lower class people," Minister of Energy and Mineral Resources JeroWacik said on Monday. The government is planning to increase subsidized gasoline and diesel oil prices. It has now two options, one with a dual pricing system and the other is a single one. The government was previously opted to introduce the dual pricing system where it will maintain its current price of Rp4,500 per liter for public transportation vehicles and motorbikes but raise it to Rp6,500 per liter for private cars. However, it said on Monday that it was opting to the option of a single pricing scheme where the price would be raised from Rp4,500 per liter but would be set lower than Rp6,500 per liter. "The government is likely to impose a single price system based on the desire of the people, and it will be set at a price of lower than Rp6,500 per liter," Minister Jero Wacik said. According to Chief Economic Minister Hatta Rajasa, the dual pricing system is better in term of fairness for small people but it is difficult to be implemented in the field. "We are now studying two pricing options. The dual pricing system is actually the best one but its implementation in the field is difficult. After all, fuel stations are willing the implementation of a single pricing. The people also have that desire," Hatta Rajasa said. Fuel station owners who are grouped in the Association of Fuel Station Owners (Hiswana Migas) have suggested that the government impose a single pricing system in raising subsidized fuel prices. Hiswana Migas Chairman for East Java, Bali and Nusa Tenggara, Hari Dristanto said the single pricing system was easier to implement in the fields. "The implementation of dual pricing system where fuel prices are raised only for private cars will create problems in the field, Hari said. He hoped that the government would announce soon the price increase of subsidized fuels. The government so far has provided a subsidy of about Rp5,000 per liter of premium gasoline and diesel oil for vehicles, selling it at Rp4,500 per liter for both private and public transportation vehicles. The economic price for this fuel is estimated at Rp9,500 per liter. Under the 2013 state budget, the total quota of subsidized fuels has been set at 46.01 million kiloliters consisting of 29.2 million kiloliters of gasoline, 1.7 million kiloliters of kerosene, and 15.11 million kiloliters of diesel oil.