Subsidized Fuel Price Hike Proposed

JAKARTA - The Indonesian Indigenous Businessmen Association (HIPPI) has proposed that the government raise the prices of subsidized fuels rather than limiting their use.

The limitation of subsidized fuel consumption would weaken the regional economy which is dominated by indigenous entrepreneurs, HIPPI Secretary General Herman Heru Suprobo said in a press statement here on Monday. The move would no doubt have an impact on the supply of basic necessaries to the public, he said.

"Therefore, the solution to the problem is raising the prices of subsidized fuels by 11 percent or Rp500 a liter according to the results of a study conducted by the team in charge of assessing the limitation of subsidized fuels," he said.

The limitation of subsidized fuel consumption would disrupt the growth of regional economy, he said, adding an increase in subsidized fuel consumption implied that the economy grew significantly.

"This means that industries in regions badly need subsidized fuels. So if subsidized fuel consumption is restricted this will have an impact on the regional economy as a whole," he said.

He feared that the productivity of HIPPI members would be disrupted if the government pushed through the plan to limit the use of subsidized fuels.

source : kompas.com