Fuel price rise depends on House’s nod

Finance minister Agus Martowardojo says that raising fuel prices can only be conducted if the House of Representatives provides approval.

Agus says the State Budget Law only allows the government to limit fuel subsidy, not to raise fuel prices, while the government needs to provide a range of alternatives for fossil fuel.

“If we are asked whether we are going to raise fuel prices, then, based on the law, we cannot do that,” he told reporters at the House on Tuesday.

“However, there have been talks recently between the House commission VII [overseeing energy] and the government on the possibility to raise fuel prices. If this option is made available, then it should be done under the House’s consent,” he added.

Agus said that the government would focus on launching the planned fuel subsidy restriction on April 1.

According to a government roadmap, the first phase will limit sales of the most popular fuel, Premium, in Java and Bali starting April, followed by Sumatra in January 2013, Kalimantan in July 2013, Sulawesi in January 2014 and Maluku and Papua in July 2014.

Limitations on diesel fuel will come into effect in July 2013 for Java, Bali, Sumatra and Kalimantan, followed by Sulawesi in January 2014 and finally Maluku and Papua in July 2014.

The government’s plans on fuel price rise still await the House’s approval.

Critics said it would be more feasible for the government to raise the Premium fuel price by Rp 1,000 (11 US cents) rather than implementing its fuel restriction plan. (mtq)