ID :
35938
Tue, 12/16/2008 - 17:12
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Shortlink :
https://www.oananews.org//node/35938
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PRICES UNLIKELY TO GO DOWN FOLLOWING CUTS IN FUEL PRICES
Jakarta, Dec 15 (ANTARA) - Trade Minister Mari Pangestu said there was no guarantee that the lowering of premium gasoline and diesel oil prices would also help drag commodity prices down.
"But it is expected that the fuel oil price cuts would reduce transportation costs so that it would help small-medium scale enterprises to carry out cost efficiency," the minister said here on Monday.
He said that however that if small-medium and large scale businesses were able to carry out cost efficiency, goods prices could also be lowered.
The government on Monday lowered the prices of premium gasoline from Rp5,500 per liter to Rp5,000 and diesel oil from Rp5,500 a liter to Rp4,800 per liter.
The lowering of the premium gasoline price was taken for the second time since this month after the government cut it from Rp6,000 per liter on December 1, to Rp5,500. Thus, the government has cut gasoline price by Rp1,000 and diesel oil by Rp700 per litter.
The government decided to lower fuel oil prices after the world crude prices fell steeply from US$147 in July to about US$40 a barrel this month.
It hoped that the fuel oil price cuts would reduce inflation by 0.3 percent to 0.5 percent so that the people's purchasing power could be maintained.
Meanwhile, Industry Minister Fahmi Idris said the lowering of the domestic prices of fuel oil could reduce the production costs of industries, yet it would be unable to prevent layoffs.
"The cuts in premium gasoline and diesel oil prices would have broad impact on transportation costs that would in the end affect the energy cost structure of industries' total production costs," Fahmi Idris said.
He said however that it could not prevent layoffs as they happened because of various factors, particularly of the termination in demand for exports to destination countries.
With no demand for exports, industries will reduce their production, not because of increase in production costs but of no demand. ***8***
(A014/A/f001/a/f001)
"But it is expected that the fuel oil price cuts would reduce transportation costs so that it would help small-medium scale enterprises to carry out cost efficiency," the minister said here on Monday.
He said that however that if small-medium and large scale businesses were able to carry out cost efficiency, goods prices could also be lowered.
The government on Monday lowered the prices of premium gasoline from Rp5,500 per liter to Rp5,000 and diesel oil from Rp5,500 a liter to Rp4,800 per liter.
The lowering of the premium gasoline price was taken for the second time since this month after the government cut it from Rp6,000 per liter on December 1, to Rp5,500. Thus, the government has cut gasoline price by Rp1,000 and diesel oil by Rp700 per litter.
The government decided to lower fuel oil prices after the world crude prices fell steeply from US$147 in July to about US$40 a barrel this month.
It hoped that the fuel oil price cuts would reduce inflation by 0.3 percent to 0.5 percent so that the people's purchasing power could be maintained.
Meanwhile, Industry Minister Fahmi Idris said the lowering of the domestic prices of fuel oil could reduce the production costs of industries, yet it would be unable to prevent layoffs.
"The cuts in premium gasoline and diesel oil prices would have broad impact on transportation costs that would in the end affect the energy cost structure of industries' total production costs," Fahmi Idris said.
He said however that it could not prevent layoffs as they happened because of various factors, particularly of the termination in demand for exports to destination countries.
With no demand for exports, industries will reduce their production, not because of increase in production costs but of no demand. ***8***
(A014/A/f001/a/f001)
