Industries ask govt not to cut fuel subsidy by 20 percent

Local manufacturers called on the government not to cut subsidy on industrial diesel by 20 percent in April this year, but suggested that the subsidy reduction should be implemented gradually.

The Bisnis Indonesia daily quoted Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Aburizal Bakrie as saying that cutting down the fuel subsidy by 20 percent would create a very heavy burden to the business sector because the price of the fuel product would soar.

Aburizal said that the reduction in the fuel subsidy should be done gradually, and that the government should also resolve the various security problems at home to help reduce production and transportation costs.

Other businessmen quoted by the paper also demand the same thing.

The government plans to cut down fuel subsidy by 20 percent to help ease the burden of the 2001 state budget. The government last year raised fuel prices by an average of 12 percent. (*)