House finally approves govt's plan to raise fuel prices

The House of Representatives finally approved a revision in the 2005 state budget through a voting on Tuesday, paving the way for the government to go ahead with its plan to increase in the prices of fuel products.

With the approval, the House agreed the government’s plan to limit the fuel subsidy at Rp 89.2 trillion in 2005. The cut in the subsidy would automatically result in the increase in the fuel prices.

The House members had also agreed to let the government to decide the percentage of the fuel price increase. The government has said that it would increase the fuel prices by between 50 percent and 80 percent.

The government initially fixed this year's fuel subsidy at Rp 76.5 trillion. But soaring international oil prices has caused fuel subsidy to soar to an unaffordable level of around Rp 101.47 trillion, forcing the government to revise the state budget and proposed a hike in fuel prices to limit subsidy at affordable level.(dino)