Fuel Price Hike Forecast To Weaken Public's Purchasing Power

Pekanbaru, Riau, Nov 18 (Antara) - The fuel price hike will weaken the purchasing power of the public, particularly those belonging to the middle and lower classes, according to the Indonesian Consumer Protection Foundation (YLKI) of the Riau chapter. "This situation will disadvantage those engaged in industry and agriculture," the Riau YLKI Director Sukardi Ali Zahar emphasized here on Tuesday. The YLKI regretted the government`s decision to hike the fuel prices that has led to a rise in the prices of other goods. "As we all know, even before the fuel price hike, the prices of basic commodities were already increased. It is possible that the traders will again raise the prices after the government officially announced the fuel price hike," he noted. He believed that the fuel price hike would lead to a rise in inflation and weaken the purchasing power of the Indonesian people. President Joko Widodo (Jokowi) announced the rise in the price of premium gasoline to Rp8.5 thousand per liter from Rp6.5 thousand and that of automotive diesel oil to Rp7.5 thousand from Rp5.5 thousand per liter originally. The price of kerosene, however, remains unchanged at Rp2.5 thousand per liter. Jokowi explained that the subsidy would be utilized to boost the productive sectors such as education and public health and to finance infrastructure projects. The president stated that the government needed substantial funds to finance the development of infrastructure and improve its educational and health services. These required funds were frequently unavailable since a considerable amount was spent on fuel subsidy, he noted. Apart from that, the government will compensate the poor for the fuel price hike by providing them with Prosperous Family Cards, Indonesia Health Cards, and Indonesia Smart Cards. "The move is aimed at maintaining the purchasing power of the people and encouraging them to carry out business undertakings in productive sectors," Jokowi explained. In the meantime, Minister for Energy and Mineral Resources Sudirman Said affirmed that the new selling prices of fuel oils have been stipulated in the Minister of Energy and Mineral Resources Regulation No. 34/2014.