House to discuss increase in fuel prices

22:08

A special team of the Commission VIII of the House of Representatives and its counterpart from the government will discuss a proposal to increase in fuel price, beginning Monday (today).

Pramono Anung, the chairman of the House tariff team, said in Jakarta over the weekend that his team would propose only an average increase of 10 percent except for karosene and diesel oil.

"We want to limit the increase in petroleum prices by an average of 10 percent as initially proposed. The price of karosene and diesel oil will, however, be maintained at the current level," he said. The government's team has proposed an average increase of 20 percent for all fuel products, much lower than the 10 percent increase proposed by its House counterpart.

Pramono said that the House team would also propose an increase in the oil price reference used in calculating the state revenues from oil receipts in the January-December state budget to US$20 per barrel from $18 per barrel as proposed by the government.

The recent development in oil prices, which last week reached its new record high of $30 per barrel in nine years, gives much more leeway for the government to raise the oil price reference in the state budget,

According to him an increase in the oil reference price by US$1 would result in an increase in the state revenues by about Rp 3 trillion, half of which could be used to subsidize the fuel sales in the domestic market.

The government and House teams last week agreed to propose an average increase in electricity tariffs by 29.43 percent beginning April, this year. ( * ).