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Govt seeks to avert fuel price hike on public transportation sector
The Transportation Ministry has taken several steps to avoid steep price rises, namely by adjusting the tariff on economy-class public transportation, especially on land transportation modes.
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he government is preparing a cushion to soften the blow of the recent subsidized fuel hike on the transportation sector, considering that the cost of fuel is a major component in transportation.
Transportation Minister Budi Karya Sumadi said that the ministry was coordinating with other ministries and state agencies, including local governments and stakeholders, and had listened to suggestions and inputs from various parties.
“Fuel is a fairly large component in transportation [costs], ranging from 11 to 40 percent [of the total], so we have to make various adjustments. On the other hand, we are also very aware of the impact of fuel price adjustments on the inflation rate," he said in a statement on Monday.
Several steps have been taken by the ministry, including adjusting the tariff for economy-class public transportation, especially for land transportation modes.
"The tariff will be determined by the study we are conducting, and the results will be conveyed in the near future," said Budi.
The next step, he announced, was to immediately set an online motorcycle taxi fare adjustment.
"We will announce the tariff adjustment for ojol [online motorcycle taxis] in the next two days, with the amount being adjusted to the latest adjusted fuel price," he added.
Read also: Govt puts off motorcycle taxi rate hike in last-minute decision
In order for the implementation to run well, the minister has asked the land transportation director general to intensify communication with ojol drivers and their applicator firms.
Meanwhile, Budi Karya said the impact of the subsidized fuel price increase on economy-class sea, air and rail transportation modes would not be too significant, however, a study on the effect would still be carried out with the findings announced in the near future.
“For air transportation, we are currently seeing a downward trend in flight ticket prices at certain times. This is something exciting and in line with our shared expectations," he noted.
The minister also stated that, to help ease the burden on the community and also on transportation actors, the government was providing social assistance through wage subsidies for 16 million workers with a salary below Rp 3.5 million (US$235) a month.
In addition, subsidies in the transportation sector for angkot (minivan) drivers, online motorcycle taxi drivers and for fishermen are set aside in a fuel subsidy allocation, the distribution of which would be carried out by the regional governments.
Budi invited business actors in the transportation sector to create a new balance together. "Safe transportation services can be maintained, yet at the same time, they can still provide affordable fares for the community."
Transportation, which supports community mobility and the flow of goods around the nation, is the sector most affected by the subsidized fuel hike.
