Govt postpones fuel price hike

The government has postponed its plan to raise fuel prices by Jan. 1, said Minister of Mines and Energy Purnomo Yusgiantoro on Wednesday.

"(There will be) no increase in the price of fuel oil products. That is our official statement," Purnomo said as quoted by Antara.

The minister said the government was still studying issues related to the increase in fuel prices that must be handled by the government, such as the distribution of compensation funds to the poor.

He said the government's calculation of new fuel prices would be based on several assumptions, including the government's Rp 32 trillion (US$3.2 billion) oil subsidy, as stated in the 2002 state budget.

The consideration would also be based on the government's oil price, which has been set in the budget at US$22 per barrel, Purnomo said.

However, he did not provide details of whether the government had set a new date for the fuel price increase. Previously, the government had said that it would increase fuel prices on Jan. 1, 2002.

The decrease in the government's fuel subsidy is part of its commitment to the International Monetary Fund.(*)