Fuel prices may be lowered January 1

The government plans to set new fuel prices on January 1 to reflect the current drop in global prices and other factors such as the weakening of the rupiah against the US dollar, reports said on Tuesday.

Coordinating Minister for the Economy Sofyan Djalil was quoted as saying it may result in lower prices of subsidized fuel products. ?Hopefully, it could be lowered depending on their economical price,? he was quoted by Bisnis Indonesia as saying.

He also signaled that the adjustment would be followed by the implementation of a fixed-subsidy policy, where a fuel subsidy would be fixed at certain amount, for example Rp 1,000 per liter, to help safeguard the state budget against excessive surge in subsidy burden.

Some lawmakers, however, question the plan to impose the fixed subsidy system, saying it moves against the Constitution, and the ruling by the Constitutional Court, which bans the government from letting the price of subsidized fuels determined by market mechanism.(*)