BUSINESSES FEEL IMPACT FROM 30 PCT FUEL OIL PRICE HIKE

Jakarta, June 19 (ANTARA) - Businesses already suffered from the 10 pct oil price hike in the last three months.

"It is true businesses did not enjoy a subsidy, so that the fuel oil they are using in the production process had already been adjusted to estimated 30 pct raise in the next three months," Finance Minister Sri Mulyani Indrawati said in Jakarta, Thursday.
She said the extent of the fuel oil component in production cost will depend on the lines of business in question. The transportation sector, for instance, is facing a heavier burden than other sectors in their fuel oil consumption.

The minister said businesses including the Indonesian Chamber of Commerce and Industry (Kadin) view the oil price hike from two aspects, namely from the aspect for their own consumption, or transferred to the consumers.

She also said that in the first quarter of 2009 consumption by the public was quite high following declining prices, so that in case of a price hike, the purchasing power of the public will be affected.

In anticipation of negative impacts on the national economy, the minister said the government will resort to all its fiscal instruments to preserve a favorable national economic condition.