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Jakarta Post

Fuel-price hike still at play

President Susilo Bambang Yudhoyono’s government had a face-saving measure from the House of Representatives, bowing to pressure from the public to not increase fuel prices on April 1

Margareth S. Aritonang and Ridwan Max Sijabat (The Jakarta Post)
Jakarta
Sat, March 31, 2012

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Fuel-price hike still at play

P

resident Susilo Bambang Yudhoyono’s government had a face-saving measure from the House of Representatives, bowing to pressure from the public to not increase fuel prices on April 1.

A total of 356 lawmakers voted for the second option of change the fuel price if the Indonesia Crude Price increases or decreases by 15 percent above the budget forecast within six months.

Ninety three lawmakers of the Indonesian Democratic Party of Struggle (PDIP) and members of Hanura opted to walk out instead.

Eighty legislators from the Prosperous Justice Party (PKS) and the Great Indonesian Movement Party (Gerindra), plus Effendi Choirie and Lily Wahid of the National Awakening Party (PKB), chose the first option of refusing the increase in fuel prices.

The plenary session — which had been adjourned for six hours to allow lawmakers for intensive lobbying — had to be extended for one hour to allow for voting.

“With the voting, the House passed the second option into law,” House Speaker Marzuki Alie of Yudhoyono’s Democratic Party announced.

The announcement over the vote was marred by clashes between university students observing the plenary session and the House internal security guards.

“If the Indonesian Crude Oil Price [ICP] increases or decreases by 15 percent within six months, the government is authorized to increase fuel prices,” Finance Minister Agus Martowardojo said, quoting the voting result.

“The government agrees that the state budget be endorsed into law,” he added.

The government had proposed to increase subsidized fuel price from Rp 4,500 per liter to Rp 6,000 per liter. The plan, however, met strong opposition from the public, who had held rallies across the country over the past three days.

Despite the plan to raise fuel prices, the government still needs to increase its fuel subsidy to Rp 137.37 trillion (US$15 billion) from Rp 123.59 trillion in the orginal budget to cope with the surge of global crude oil prices.

As of February, the ICP was already 22 percent higher than the 2012 state budget prediction of a maximum price of US$100 per barrel. The $122 per barrel price in February was a steep rise from the $115.91 recorded the previous month.

The plenary session had to be adjourned for six hours to allow for intensive lobbying. However, political parties kept changing their stance when the session resumed at about 11 p.m.

Before the meeting, Yudhoyono’s plan was supported only by four factions in the House: his own Democratic Party, the National Mandate Party (PAN), the National Awakening Party (PKB) and the United Development Party (PPP).

But after intense negotiations, the Golkar Party and the Prosperous Justice Party (PKS) joined the pro-hike camp.

Later, the six House factions agreed that fuel-price increases should be the authority of the government and they would conditionally support that.

“We propose the conditions to prevent the government from deliberately increasing the fuel price,” the PAN’s faction leader, Tjatur Sapto Eddy, said.

Three opposing factions — the Indonesian Democratic Party of Struggle (PDI-P), the People’s Conscience Party (Hanura) and the Great Indonesia Movement (Gerindra) Party — meanwhile expressed their disappointment over the prolonged negotiations at the House.

“This is not a good decision. As a chairman of the plenary meeting, [Marzuki] must not only think about the interest of the six factions. This is a parliamentary meeting, not a meeting of the coalition,” PDI-P legislator Arya Bima said, referring to Yudhoyono’s coalition.

The Golkar Party rejected the fuel policy in a surprising blow to the coalition on Thursday.

“Those parties, which had opposed the fuel price increase but later accepted with some conditions, are lying,” Hanura secretary Saleh Husein said.

Meanwhile, Vice President Boediono arrived at the Presidential Palace at about 10 p.m. after being summoned by President Susilo Bambang Yudhoyono.

“They are monitoring [the plenary session] while communicating,” presidential spokesman Julian Aldrin Pasha said. Other attendance included Coordinating Economic Minister Hatta Rajasa, Coordinating Political, Legal and Security Affairs Minister Djoko Suyanto, Coordinating People’s Welfare Minister Agung Laksono, State Secretary Sudi Silalahi and Cabinet Secretary Dipo Alam.

Julian said the government would wait the result from the plenary session.

“The government’s response would be made not today but in the next Cabinet meeting,” he said.

Options

- Article 7 (6) The fuel price will not be increased.

- Article 7 (6) The fuel price will not be increased and Article 7 (6 a) The government can increase the fuel price if the Indonesian Crude Price increases 15 percent above the budget forecast within 6 months.


Rangga Fadhillah contributes to the story.

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