President Receives Results of Price Hike Calculation
President Jokowi said earlier on a number of occasions that the decision to increase subsidized fuel prices should be based on careful calculations.
By
Kompas Team
·5 minutes read
SAUMLAKI, KOMPAS — President Joko “Jokowi” Widodo has received the results for the calculation of the increase in prices of subsidized fuel oil. However, the increase in fuel prices has not yet been decided.
"For the fuel price increase, everything is still being calculated and Friday (Sep. 2) the result of the price increase calculation will be given to me" President Jokowi told the press after monitoring the distribution of cash transfer (BLT) at the Saumlaki Post Office, South Tanimbar, the Tanimbar Islands Regency, Maluku. A Kompas source said that the result of the fuel price calculation has been received by the President.
President Jokowi said earlier on a number of occasions that the decision to increase subsidized fuel prices should be based on careful calculations. During a visit in Timika, Papua, the day before going to Maluku, the President said that the increase in subsidized fuel prices is being carried out carefully.
Careful consideration is needed as the increase in subsidized fuel prices will increase prices of basic commodities, which in turn will lead to inflation.
In addition, the increase of fuel prices will receive public resistance. A number of street demonstrations have taken place in Jakarta to oppose the fuel price increase plan.
However, the decision to increase the price of subsidized Pertalite gasoline and Biodiesel has not been made.
A number of meetings to discuss the subsidized fuel price increase plan have also taken place at the State Palace. The President led the meetings, which were held on Aug. 24, 25 and 29. However, the decision to increase the price of subsidized Pertalite gasoline and Biodiesel has not been made.
The State Secretariat Ministry has begun to hold a public awareness campaign on the increase in prices of Pertalite gasoline and Biodiesel, as well as LPGs in 3 kilogram canisters. Kemensetneg.ri, the ministry’s Instagram account, for example, shows that the current selling price of Biodiesel of Rp 5,150 per liter has far exceeded its real market (economic) price of Rp 13,950 per liter. With such a price level, the government has to provide a subsidy Rp 8,800 per liter.
Meanwhile, the current selling price of the widely used Pertalite gasoline, which is now Rp 7,650 per liter, is far below its real market price of Rp 14,450 per liter. Therefore, the government’s subsidy for gasoline reaches Rp 6,800 per liter. While the 3 kilogram LPG canister is sold at Rp 4,250 per kg, far lower than its real market price of Rp 18,500 per kg.
State Secretary Minister Pratikno was not available for comment.
"Everything depends on the President, careful calculations from all sides and also on social protection," said another official at the State Palace.
Social assistance
Regarding social protection, Finance Minister Sri Mulyani has said that the government will provide three types of social assistance programs worth Rp 24.2 trillion (US$1.6 billion) to maintain the people's buying power, which may be affected by the increase in fuel prices.
The three social assistance programs will include a cash transfer (BLT) for 20.65 million low-income families, wage subsidies for 16 million formal workers with a monthly salary of Rp 3.5 million below and transportation assistance for ojek (motorcycle taxi drivers) and fishermen as well as additional social assistance to be taken from 2 percent of the general allocation fund and profit sharing given to local governments.
The low-income families will receive a monthly cash transfer of Rp 150,000 for four months. The cash transfer will be disbursed in two stages so that they receive the money every two months, each worth Rp 300,000.
We hope that with the cash assistance, the people's buying power can be well-maintained.
To ensure the smooth distribution of social assistance, the President checked the distribution of cash assistance in-person at the post office in Saumlaki, South Tanimbar, Tanimbar Islands Regency.
“The cash aid was given for two months to low-income families in Saumlaki, the Tanimbar Islands Regency, Maluku Province. We hope that with the cash assistance, the people's buying power can be well-maintained," he said.
In addition to providing the cash transfer for the fuel increase, President Jokowi also distributed cash aid for productive activities. "Remember, the cash assistance should not be used to buy a mobile phone or new clothes," he said.
In the Tanimbar Islands, a number of residents were reluctant to question the planned increase in fuel prices.
"The increase in fuel prices will come first. It has occurred before, so there’s no need to be too noisy. We leave it to the government because this might be the best option,” said Yanto Semangun, 37, a resident of Saumlaki.
From Saumlaki on Friday afternoon, President Jokowi flew to Lampung. There the President distributed social assistance to reduce the impact of rising goods prices.
Meanwhile, at the opening of the West Java Food Inflation Control National Movement in Bandung, Bank Indonesia Deputy Governor Juda Agung reminded all parties to be wary of possible inflation as a result of the increase in fuel prices. (INA/FRN/FLO/NIK/VIO/FLO)
(This article was translated by Hendarsyah Tarmizi)