Jakarta, NU Online
Vice President Jusuf Kalla has hinted the government is likely to make a decision on fuel price hikes by July, as the rising price of crude oil continues to stretch subsidies.
"Oil prices have indeed exceeded our assumptions in the revised state budget ... we still have time to make adjustments in June and July," Kalla said Friday (18/4).<>
The revised 2008 state budget, approved by parliament earlier this month, assumes oil prices of US$95 a barrel and earmarks a total of Rp 126.8 trillion ($13.81 billion) for fuel subsidies, up from Rp 42 trillion in the original state budget.
In a display of caution brought on by rising oil prices, the parliament is allowing the government to cut fuel subsidies.
Subsidy cuts will result in higher fuel prices if the annual average Indonesian Crude Price (ICP) exceeds $100 per barrel and total annual fuel consumption climbs above 37 million kiloliters.
The ICP averaged $103.10 per barrel in the first quarter of 2008.
Kalla said the government would rely on other measures to keep the budget in check before increasing prices. Such measures include introducing "smart cards" for individual car owners and converting households from kerosene to gas.
Finance Minister Sri Mulyani Indrawati said the government would monitor crude oil prices during the first semester of this year before deciding whether to increase fuel prices.
"If it is needed, we will not rule out the possibility. We will report it to the House of Representatives first," Mulyani was quoted by The Jakarta Post as saying.
President Susilo Bambang Yudhoyono said in the palace Friday that despite the pressure surging oil prices had placed on the state budget, the government would seek other solutions before increasing fuel prices.
"We cannot easily raise fuel prices. We will find other ways to handle this," said Yudhoyono, who has promised not to increase fuel prices before next year.
The government's last fuel price hike was in 2005 when it more than doubled prices, sending inflation into double digits.
The government has refused to raise fuel prices for fear of increasing the financial burden on poor people, who have been faced with soaring food prices over the past few months.
Many analysts have criticized the government for allocating too much money for fuel subsidies, which account for more than 10 percent of the government's total expenses of Rp 987.48 trillion this year. They have urged the government to raise fuel prices because the main beneficiaries of the subsidies are people who own personal cars. (dar)
Vice President Jusuf Kalla has hinted the government is likely to make a decision on fuel price hikes by July, as the rising price of crude oil continues to stretch subsidies.
"Oil prices have indeed exceeded our assumptions in the revised state budget ... we still have time to make adjustments in June and July," Kalla said Friday (18/4).<>
The revised 2008 state budget, approved by parliament earlier this month, assumes oil prices of US$95 a barrel and earmarks a total of Rp 126.8 trillion ($13.81 billion) for fuel subsidies, up from Rp 42 trillion in the original state budget.
In a display of caution brought on by rising oil prices, the parliament is allowing the government to cut fuel subsidies.
Subsidy cuts will result in higher fuel prices if the annual average Indonesian Crude Price (ICP) exceeds $100 per barrel and total annual fuel consumption climbs above 37 million kiloliters.
The ICP averaged $103.10 per barrel in the first quarter of 2008.
Kalla said the government would rely on other measures to keep the budget in check before increasing prices. Such measures include introducing "smart cards" for individual car owners and converting households from kerosene to gas.
Finance Minister Sri Mulyani Indrawati said the government would monitor crude oil prices during the first semester of this year before deciding whether to increase fuel prices.
"If it is needed, we will not rule out the possibility. We will report it to the House of Representatives first," Mulyani was quoted by The Jakarta Post as saying.
President Susilo Bambang Yudhoyono said in the palace Friday that despite the pressure surging oil prices had placed on the state budget, the government would seek other solutions before increasing fuel prices.
"We cannot easily raise fuel prices. We will find other ways to handle this," said Yudhoyono, who has promised not to increase fuel prices before next year.
The government's last fuel price hike was in 2005 when it more than doubled prices, sending inflation into double digits.
The government has refused to raise fuel prices for fear of increasing the financial burden on poor people, who have been faced with soaring food prices over the past few months.
Many analysts have criticized the government for allocating too much money for fuel subsidies, which account for more than 10 percent of the government's total expenses of Rp 987.48 trillion this year. They have urged the government to raise fuel prices because the main beneficiaries of the subsidies are people who own personal cars. (dar)
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