Fuel Price Hike Expected to Be Announced Today: Govt

Security at gas stations will be high in anticipation of possible attacks following the announcement. (JG Photo/Fajri Raharjo)

By : Ridho Syukra | on 9:38 AM June 17, 2013
Category : News, Featured

Security at gas stations will be high in anticipation of possible attacks following the announcement. (JG Photo/Fajri Raharjo) Security at gas stations will be high in anticipation of possible attacks following the announcement. (JG Photo/Fajri Raharjo)

The government is set to announce an increase in the price of subsidized fuel today, following a plenary session of the House of Representatives at which the revised 2013 state budget is expected to be approved, officials said over the weekend.

Armida Alisjahbana, the minister for national development planning, said on Saturday that she was optimistic that the draft budget, in which the higher fuel price is assumed, would be passed without any major hitches.

“For its part, the government is ready to announce [the fuel price increase] as soon as the revised budget is officially passed,” she said.

In the revised budget, the government has set the fuel subsidy at Rp 199.9 trillion, a figure that accommodates fuel sold only at the proposed higher price, in an effort to ease the pressure of the ballooning subsidy on the public purse.

The government plans to raise the price of subsidized gasoline from Rp 4,500 per liter to Rp 6,500, and of subsidized diesel from Rp 4,500 to Rp 5,500.

The revised budget also includes funding for a cash handout program, known as the BLSM, which is aimed at cushioning the blow of the price hike on the country’s 15.5 million poorest households. The House Budget Committee agreed last week to allocate Rp 9.3 trillion ($930 million) for the scheme, but it must be approved with the rest of the budget at today’s plenary session to go into effect.

Dahlan Iskan, the minister for state-owned enterprises, also said that the government would make the announcement as soon as the budget was approved.

“After the meeting on June 17, the price hike will be announced,” he said on Saturday as quoted by Antaranews.com.

He added that the government’s plan to raise the price could not be delayed any longer. Every year, Dahlan said, one million new cars and eight million new motorcycles hit the country’s streets, causing demand for fuel to skyrocket.

“The price of fuel should go up. Even though there are parties that don’t want it to increase, it still should be done,” the minister said.

“The rupiah is depreciating because of the high import volume [of fuel].”

Several parties at the House, including the Great Indonesia Movement Party (Gerindra), the opposition Indonesian Democratic Party of Struggle (PDI-P) and the People’s Conscience Party (Hanura), have expressed their opposition to the plan.

The Prosperous Justice Party (PKS), meanwhile, originally protested the plan but flipped its position on Friday after the ruling Democratic Party threatened to oust it from the coalition.

The PDI-P, Gerindra and Hanura hold a combined 137 seats at the 560-seat House, and even with the PKS’s 57 seats, would easily be outvoted by the parties in support of the fuel price hike, making its passage in the revised budget virtually certain.

In its anticipated announcement, coming after months of speculation, debate, protests and reports of fuel hoarding, the government is also expected to say when the higher price will go into effect.

Even though the policy looks set to become official, opposition to it continues to smolder, with massive protests planned for today across the capital.

The Jakarta Police said on Sunday that a workers’ union in Tangerang planned to gather around 1,000 people for protests at the Kebon Nanas toll gate and outside Soekarno-Hatta International Airport at around 8 a.m.

Another rally is expected outside the House complex from morning until noon, with around 2,000 people in attendance, with a smaller rally outside City Hall.

Djoko Suyanto, the coordinating minister for political, legal and security affairs, called on Sunday for the demonstrators to remain orderly and not to turn violent.

He added that a heavy security presence would be deployed to ensure that the demonstrations did not get out of hand.

Police will also deploy personnel to gas stations across Jakarta in anticipation of possible attacks mirroring recent attacks on gas stations elsewhere in the country.

“There are around 270 gas stations in Jakarta where we will station two to five personnel each, or more if needed,” Sr. Comr. Rikwanto, a spokesman for the Jakarta Police, said on Sunday.

He added that police had also been carrying out raids against fuel hoarders since last week, and would continue up until the new price took effect.

Critics have lambasted the Yudhoyono administration for not raising the fuel price much earlier, and the president’s decision to do so now, less than a year before the next legislative election, has been deemed a double-edged sword.

“On the one hand, he’s risking the popularity of his Democratic Party by doing this, but on the other hand, the measure is necessary to ease the fuel subsidy pressure on the state budget,” Siti Zuhro, a political analyst with the Indonesian Institute of Sciences (LIPI), said on Sunday.

She also lashed out at the PKS for first siding with the increase, then opposing it, before flip-flopping again, saying this inconsistency painted the country’s biggest Islamic party as opportunistic.

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