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he Indonesian Forwarder and Logistics Association (ALFI) has expressed objection to the Batam city administration’s policy of banning the use of subsidized fuel for logistics and construction projects and industrial supporting vehicles, arguing it will affect staple food prices in the region.

Daniel Burhnuddin of the association said that the implementation of the policy would force all ALFI members in the region to increase the tariffs of their services by 40 percent from the present tariffs.

“A bigger impact will be suffered by the industrial sector in Batam. Once implemented, it will significantly increase the inflation rate,” he said on Friday.

Municipal Circular No 562/2011 banned construction projects and industrial supporting vehicles such as trailers and prime mover trucks, cranes, mixer trucks, dump trucks and other heavy vehicles from using subsidized fuel, which is currently half the price of non-subsidized fuel.

A liter of subsidized diesel costs Rp 4,500 (50 US cents) while non-subsidized diesel is priced at Rp 9,000. The policy, which is based on downstream oil and gas regulator BPH Migas’ letter No 613/2010 on non-subsidized fuel for transportation, is expected to go into effect this month.

Daniel said that a trailer or prime mover needed a liter of diesel fuel to move 2 kilometers. A trailer of his, for example, needed 200 liters of fuel a day for loading at the port and at the factory.

“We have conveyed the message to the municipal administration,” Daniel said.

Separately, the head of Batam industry, energy and mineral resources agency, Ahmad Hijazi, said that the policy had been issued to help secure the subsidized fuel quota supply in the municipality until the end of this year.