Govt mulls three options to solve fuel crisis

As the clock continues to tick and the cost of subsidizing fuel soars amid rising oil prices, exacerbated by a jump in domestic fuel consumption, the government remains undecided on which option it will take to prevent the fuel problem from disrupting the economy, The Jakarta Post newspaper reported in its Saturday edition.

The government is now preparing three options to address the problems, and has partly begun one of them, Vice President Jusuf Kalla said during a press conference on Friday.

" The options will be; leaving the subsidy costs to increase without doing anything, reducing the subsidy expenditures -- which will mean another rise in domestic fuel prices -- and reducing consumption. We have begun the third option now for a short-term period," he explained.

The government launched a public energy conservation movement earlier this week, although many have criticized it as ineffective, calling instead for the government to reconsider its fuel subsidy policy thereby increasing the price that consumers pay for gasoline, diesel and other fuels, for the second time in five months.

Kalla said the remaining two options were hard to execute as both required sacrifices from the government and the public.

The government is facing risks, in terms of its fiscal stability and its ability to maintain its handle on the economy, with the fuel subsidy payments set to soar amid a combination of higher fuel consumption, rising global oil prices and a weakening local currency.(*)