Indonesia’s Gasoline Debate Remains In Flux

By webadmin on 12:18 am Mar 16, 2012
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Ezra Sihite, Arientha Primanita & Markus Junianto Sihaloho

Opposition to plans to raise the price of subsidized fuels is softening within the ranks of the ruling coalition of parties, although it remains unclear whether the government will go through with the increase next month.

The Prosperous Justice Party (PKS) aired strong opposition to the plan through statements by its lawmakers earlier this week, but the party softened its tone a bit on Thursday.

“We are still studying the scheme that is being proposed and there is not yet an agreement or disagreement,” said Mustafa Kamal, PKS faction chairman at the House of Representatives.

He said that at a meeting of the joint secretariat of the coalition late on Wednesday, President Susilo Bambang Yudhoyono stressed that any increase in the price of subsidized fuel would be done in accordance with the laws of the country.

Mustafa said his party was still studying the draft of the state budget revision which includes the fuel price increase.

“We have not yet finished [studying the draft.] Hopefully, at the House Budget Commission, there will be a midway solution,” he said.

Speaking after the three-hour talks by the joint secretariat late on Wednesday, Golkar Party chairman Aburizal Bakrie said that raising fuel prices was “the worst-case scenario.”

“We discussed the worst-case scenario But if it is raised, what we should think about is empathy for the people. The coalition agreed to prioritize empathy if that last option is taken,” Aburizal said.

He also said the coalition agreed to leave the decision to the political factions at the House of Representatives.

PKS president Luthfi Hasan said the party would help promote whatever decision was taken on the matter of the increase.

Tjatur Sapto Edy, the head of the House faction of the National Mandate Party (PAN), said that a decision on whether to raise fuel prices was not made during Wednesday’s meeting.

“There was no agreement,” Tjatur said on Thursday. “The one that should decide is the House.”

The joint secretariat, he said, was aware that the increase would impact the poor and a compensation scheme in other sectors, including education, was also needed.

But he added that the form of compensation had not  been decided, either.

Saan Mustopa, the secretary of the ruling Democratic Party’s House faction, said direct cash aid was the answer to offset the impact on the poor.

“We will continue to provide direct cash assistance. This is one of the alternatives,” Saan said.

He denied accusations that such aid would be used to boost the ruling party’s popularity ahead of the 2014 elections.

The government is earmarking Rp 25.6 trillion ($2.8 billion) for 18.5 million poor households. The aid will be Rp 150,000 per month, disbursed every three months for nine months.

Edhie Baskoro Yudhoyono, the Democrats’ secretary general said the fuel price increase should be understood as beneficial for the state in the long term.