Hike on Fuel Prices Will Create ?New? Poor People

Fathan Qorib, Robert Sidauruk

Government plan to increase subsidized fuel prices will contribute to a significant rise of poverty rate. It is estimated that when the plan is implemented, there will be 4 million “new” poor people in this country.

This view was delivered by Chatib Basri, Minister of Finance, during a meeting with Commission XI at the House of Representative (House), Monday (27/5).

“Poverty rate will increase by 1,6%, which is equal to 4 million people by the end of 2013. If the Government does not have a Temporary Compensation Plan (Bantuan Langsung Semenetara Masyarakat) the figure will be realized,” said Chatib.

Therefore, parallel with the fuel increase plan, Government will provide assistances for the poor in the form of money compensation, aid for poor student , rice aid, and so forth.

Chatib further explained that 92% of subsidized fuel used for personal cars and motorcycles, while the 8% is for public transportation.

People with very low income will focus more on buying food that are consumed daily, rather than buying cars or motorcycles fuel.

Therefore, by increasing the subsidized fuel prices, subsidy in the State Budget (APBN) will be allocated to compensation programs, so it can be enjoyed by poor people.

“We believe that APBN will be managed fairly, it won’t be drained only to subsidize fuel. It’s all about allocation [for compensation programs],” he asserted.

However, Chatib further noted that such subsidy allocation requires the House’s approval as it may affect the already set macro budget plan.

“Allocating fuel subsidy to other sectors may reduce governmental institutions budget, which needs House’s approval,” he concluded.

(hot/ds)

Fathan Qorib, Robert Sidauruk

Government plan to increase subsidized fuel prices will contribute to a significant rise of poverty rate. It is estimated that when the plan is implemented, there will be 4 million “new” poor people in this country.

This view was delivered by Chatib Basri, Minister of Finance, during a meeting with Commission XI at the House of Representative (House), Monday (27/5).

“Poverty rate will increase by 1,6%, which is equal to 4 million people by the end of 2013. If the Government does not have a Temporary Compensation Plan (Bantuan Langsung Semenetara Masyarakat) the figure will be realized,” said Chatib.

Therefore, parallel with the fuel increase plan, Government will provide assistances for the poor in the form of money compensation, aid for poor student , rice aid, and so forth.

Chatib further explained that 92% of subsidized fuel used for personal cars and motorcycles, while the 8% is for public transportation.

People with very low income will focus more on buying food that are consumed daily, rather than buying cars or motorcycles fuel.

Therefore, by increasing the subsidized fuel prices, subsidy in the State Budget (APBN) will be allocated to compensation programs, so it can be enjoyed by poor people.

“We believe that APBN will be managed fairly, it won’t be drained only to subsidize fuel. It’s all about allocation [for compensation programs],” he asserted.

However, Chatib further noted that such subsidy allocation requires the House’s approval as it may affect the already set macro budget plan.

“Allocating fuel subsidy to other sectors may reduce governmental institutions budget, which needs House’s approval,” he concluded.

(hot/ds)

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