Indonesian Farmers Union to Challenge Fuel Price Loophole

By webadmin on 09:22 pm Apr 04, 2012
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Alina Musta’idah & Ezra Sihite

After a former minister challenged a clause in the 2012 state budget law allowing the government to raise fuel prices under certain conditions, an organization of farmers and fishermen announced it would follow suit.

Henry Saragih, head of the Indonesian Farmers Union (SPI), said his organization would bring the case to the Constitutional Court.

Clause 6A in Chapter 7 of the budget law gives the government the freedom to adjust the price of subsidized fuel if the average price of Indonesian crude oil over six months deviates more than 15 percent from the amount set in the budget. It was added after a vote by the House of Representatives on Friday

The clause, Henry said, adds to the uncertainty surrounding fuel prices and could help further drive up the prices of transportation and food, and increase farm production costs.

He said a recent increase in the government-set floor price for husked rice would be more than negated by the rising costs farmers were already facing.

Prices for many goods rose in recent weeks when it looked like the government would raise the price of subsidized fuel on April 1.

Henry did not say when the SPI would file the challenge with the Constitutional Court.

Yusril Ihza Mahendra, a former justice minister, filed a challenged to the clause with the Constitutional Court on Monday. He said that not only did it contradict another clause in the law, but that the decision-making process that brought it about was flawed.

The opposition Indonesian Democratic Party of Struggle (PDI-P) said it was ready to assist efforts to challenge the clause by providing whatever information was necessary, PDI-P secretary general Tjahjo Kumolo said.

“If there are elements of society that ask for it, we will prepare the data to back up the claims,” Tjahjo said.

Although the party firmly opposed any efforts to raise fuel prices, he said, it had to abide by the House’s decision.

Still, he said the PDI-P considered the decision-making process illegitimate because lawmakers did not provide for adequate discussion on the article and clause before they were voted on.

After Yusril filed his challenge on Monday, the House deputy speaker from Golkar, Priyo Budi Santoso, said the public should not challenge every law the House passed.

“If everything is challenged, then just don’t give the constitutional authority to the House,” he said.

With reporting from Investor Daily