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Jakarta Post

Mitigating the impact of the fuel prices increase

  • David Stanford

Jakarta   /   Tue, May 27 2008   /  03:16 pm

On Friday, the Indonesian government raised the price of fuels by 28.7 percent. International prices for oil have risen sharply over the last few years and maintaining a constant low price for fuels has been a drain on the nation's coffers. The economic and social consequences of the decision are significant. Obviously, the price of transportation will increase. Subsequently, the price of goods and services that rely on transportation will also increase. This will include many of the essential goods and services that Indonesia's poor struggle to afford even at today's prices. The impact, therefore, will be particularly severe among the economically disadvantaged in Indonesia. Despite this negative impact, the decision to increase fuel prices is appropriate, equitable and inevitable. The reality is that it is the wealthier strata of Indonesia's society that uses ...