Apindo Suggests Fuel Price Increase For All Vehicles

Jakarta, April 19 (Antara) - The Indonesian Employers` Association (APINDO) has suggested that the government raise the price of subsidized fuel for all types of vehicles so that it would not be bothered with the need to carry out supervision. "The government had better raise the price of subsidized fuel for all types of vehicles regardless of whether they are public or private vehicles," APINDO Chairman Sofjan Wanandi said here on Friday. He said that if the government raise the price of subsidized fuel for private cars only, there would be a question about who was going to supervise it. The government said the quota of subsidized fuel would reach 53 million kiloliters, exceeding the target of 46 million kiloliters in 2013 if there was no appropriate policy taken to control consumption. The government is discussing a plan to increase the price of subsidized premium gasoline for private cars. Two wheel and public transportation vehicles will see no increase in subsidized premium gasoline from the present price of Rp4,500 per liter. Sofjan said that if the government`s plan (to introduce a dual pricing system) was really implemented it could lead to misappropriation. "It is not impossible that cargo vehicles which usually purchase and use subsidized fuel will resell it because they would get more money in selling fuel than in delivering goods," Sofjan said. He said that raising equal prices for all types of vehicles would only contribute one or two percent to inflation. He also stressed that businessmen would not excessively increase goods prices in responding to subsidized fuel price rise. "If prices of gasoline increase for all types of vehicles, we will not respond it with raising goods prices excessively. Our goods prices will follow international standard prices," Sofjan said. He said that his reason to agree to a fuel price hike this year was because APINDO was aware of the need for all sides to be ready for a policy taken to maintain healthy fiscal conditions. On Wednesday, President Susilo Bambang Yudhoyono held a limited cabinet meeting to discuss the government`s plan to reduce fuel oil subsidy. After the closed-door meeting, Energy and Mineral Resources Minister Jero Wacik told reporters that the government was still deliberating in details the plan so that when it was implemented it would not create a problem. However, he said, the government was almost reaching a decision to impose a dual pricing system for subsidized premium gasoline. It was considering to impose a full subsidy and a cut subsidy for fuel which had so far been subsidized. "The people know that the government will reduce fuel subsidy. The reason is for fairness. So, the government will cut subsidy and regulate that all will enjoy equality," Jero Wacik said at the State Palace here on Wednesday. The minister said financially capable people would have a cut subsidy and for financially incapable would have a full subsidy. "The economic price of premium gasoline per liter is about Rp9,500. If it is sold at Rp4,500 per liter, it means the government provides a subsidy of Rp5,000. Financially capable people will not enjoy the full subsidy, but a subsidy of Rp3,000 per liter," he said. The minister said that the option was fair enough and could be accepted by all parties, although its technical preparations would be very complicated.