Govt may be forced to raise fuel, electricity

Surging commodity prices may force the government to raise the subsidized fuel price and electricity base tariff this year, Standard Chartered Bank economist Fauzi Ichsan said Monday.

"They will force the government to raise prices and tariffs, although not in the first three months (of 2010)," he said in a seminar held by the bank.

High commodity prices will also drive inflation to 5 percent this year, prompting the central bank to raise its policy rate from the current 6.5 percent to 7.5 percent, he added.

Inflation stood at 2.78 percent in December 2009, according to the Central Statistics Agency (BPS).