Headlines

Tensions escalate over
fuel policy

Against fuel price hike: Laborers stage a protest against the  government's plan to raise fuel prices in front of the House of Representatives building in Jakarta on Monday. The protest was aimed at forcing the legislators not to approve the plan at an ongoing plenary session. (Antara/Reno Esnir)
Against fuel price hike: Laborers stage a protest against the government's plan to raise fuel prices in front of the House of Representatives building in Jakarta on Monday. The protest was aimed at forcing the legislators not to approve the plan at an ongoing plenary session. (Antara/Reno Esnir)

As protests over the government’s plan to raise the price of fuel continue unabated, the House of Representatives’ budget committee failed to unanimously agree on a program to cushion the poor from the impact of the policy.

The failure may jeopardize President Susilo Bambang Yudhoyono’s plan to raise the fuel prices.

A voting mechanism will be put in place during the House plenary session on Monday to approve the revised state budget. Revisions include financial assistance for the poor and the new fuel subsidies budget allocation.

Voting is likely to be a close call as opposition parties — the Indonesian Democratic Party of Struggle (PDI-P), the Great Indonesia Movement (Gerindra) Party, the People’s Conscience Party (Hanura) — have
officially rejected any approval to the revised budget.

The Prosperous Justice Party (PKS) — the coalition’s rebellious wildcard — also joined the opposition camp, triggering concerns that politicians from other members of the coalition may also turn their backs on the ruling Democratic Party.

The PKS and the three opposition parties only control 196 of the total 560 House seats, but the coalition majority has occasionally lost votes as individual politicians defy party directives.

“The plan comes at the wrong time. The electricity rates are climbing and Idul Fitri is approaching. A fuel price increase will be a burden on the people,” PDI-P politician Maruarar Sirait said on Sunday.

“I believe lawmakers with conscience will listen to the concerns of the people,” he said, adding that the opposition camp would likely win the vote as financial assistance for the poor would only benefit the Democratic Party and Yudhoyono.

The PDI-P is the third-largest party in the House after the Democratic Party and Golkar Party — both members of the coalition.

Under the revised budget, direct financial assistance — Rp 150,000 (US$15) per month —would be distributed to poor households for four months.

Over the past few weeks, the government and the House have been debating this contentious subject. The whopping subsidy —fuel consumption regularly outpaces the allocated budget — has raised concerns about the sustainability of the state budget and foreign exchange reserves (forex) as the majority of fuel is imported.

Last week foreign investors dumped rupiah assets, which pulled the rupiah to its lowest point since 2009.

In less than two weeks, the Jakarta Composite Index lost 11.5 percent. Foreign investors sold their stocks for 13 straight days, withdrawing a total of $1.9 billion from stocks and rupiah bonds.

“Worries about the burdening fuel subsidies should be addressed by increased taxes. The opposition camp has been fighting for this measure,” said Maruarar.

Democratic Party legislator Sutan Batoegana said the coalition was still trying hard to convince opposition factions.

Golkar deputy secretary-general Nurul Arifin said that all Golkar lawmakers were still committed to supporting the government’s proposal.

“Direct cash assistance is urgently needed. I think the people are happy with this plan,” she said.

Nurul said the party had ordered its 106 lawmakers to attend the plenary but could not guarantee they would follow the party’s instruction.

Amid the political bickering, on Sunday the Jakarta Police prepared for the major rallies planned
for Monday. The protests will take place in front of the House compound on Jl. Gatot Subroto and in front of Kebon Nanas toll road gate that leads to Soekarno-Hatta International Airport.

The police are expecting at least 2,000 protesters, comprising students and labor union activists. In preparation the National Police have deployed more than 3,500 officers across the archipelago. Officers will also secure gas stations and depots owned by state energy firm PT Pertamina.

Students in Makassar, South Sulawesi, clashed with police and military personnel between Thursday and Saturday when they blocked several highways.

In Medan, North Sumatra, students blocked the main road to Polonia Airport on Saturday, forcing many airline passengers to walk to the airport.

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