ANT, Robert Sidauruk

The government is insisting it will continue with its recent policy to
limit the sale of subsidized diesel fuelat Pertamina petrol stations, despite a consensus that it will likely trigger a quick increase in commodity and food prices in the market.
Purnomo, Chairman of the Indonesian Employers Association Bekasi region, explained that any type of distribution barrier will always lead to an increase in commodity prices, including food items.
“The sale limitation of subsidized solar is a barrier to the distribution chain and will affect commodity prices in the market,” said Mr. Purnomo in Bekasi on Monday.
Mr. Purnomo further suggested that the government should have taken preliminary actions to reduce the impact of the policy, such as collecting data on a various relevant industries and transportation business, and also formulating strategy to address any sudden increase of commodity prices.
“While it is a positive effort by the government, there should have been a socialization of the new policy for the public before its execution,” added Mr. Purnomo.
Final Decision
Despite its domino effect on commodity prices, Chairul Tanjung, Coordinating Minister for Economic Affairs, asserted that the decision to limit the sale of subsidized diesel fuel by the current administration will not change. In addition, further actions for the transition period to the new administration will be discussed together with the president-elect.
Mr. Tanjung also indicated that discussions with the president-elect will include a focus on reducing fuel subsidies, which must be taken to preserve the stability the national economy. Mr. Tanjung refused, however, to elaborate on details of the discussions, as the court case on the outcome of the recent presidential election will be decided by the Constitutional Court on 21 August 2014.
“There are three options in regard to the policy to reduce the subsidies. It can be implemented solely by the current administration, or the new administration, or jointly by both,” informed Mr. Tanjung.
Regarding the financial memorandum that will be submitted to the House of Representatives by the President on 16 August 2014, Mr. Tanjung informed that President Yudhoyono will draft an outline for the new budget plan without involving the president-elect.
Mr. Tanjung further emphasized that the financial memorandum is merely input for the new administration and may be amended before it is passed as the 2015 State Budget (APBN 2015) by the House of Representatives.
“Even if it has been passed as the 2015 State Budget, it still can be amended,” said Mr. Tanjung.
(hot/kc)