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View all search resultsAnalysis: Crisis, what crisis? Indonesia banks on minimum response
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Motorcycle riders line up at a gas station on March 9 in Surabaya, East Java. (AFP/Juni Kriswanto)
T
he government has beaten speculators and hoarders by announcing that it will not increase domestic gasoline prices, a move that has made Indonesia a regional outlier when neighboring countries have hiked theirs in response to soaring global oil prices.
The announcement on March 31 dashed rumors that gasoline prices would go up as of April 1. It also immediately eliminated the long lines of motorists that formed at many gas stations in the penultimate week of March.
Instead, the government has simply limited the maximum daily volume of fuel purchases to 50 liters per vehicle, a generous amount for the average motorist that it would hardly make a dent in how much oil the country burns. At most, it will deter people from hoarding, a crime punishable with up to three months in jail.
It appears President Prabowo Subianto’s administration is going for the bare minimum in response to what is increasingly looking like a major global oil shortage and beyond that, a potentially imminent economic crisis.
Another measure announced at the same time is a mandatory policy for civil servants to work from home (WFH) or work from anywhere (WFA) one day per week, preferably on Fridays, ostensibly to cut fuel consumption by reducing commuter numbers. The private sector has been encouraged to adopt this policy also.
Implicit in these minimum measures is an assumption that the United States-Israeli war on Iran will end soon and that oil shipments through the contentious Strait of Hormuz will return to normal. While most countries are hoping for the best and preparing for the worst, Indonesia might end up paying a heavy price for lacking a sense of crisis.
Historically, domestic fuel price hikes have been followed by massive protests, which could be politically destabilizing. Strongman Soeharto, for example, was forced to quit the presidency in 1998 due to a massive people’s power movement that erupted a few weeks after he hiked gasoline prices at the peak of the Asian financial crisis.
