Kadin supports increase of fuel prices

The Indonesian Chamber of Commerce and Industry (Kadin) expressed its support if the government decides to raise fuel prices by reducing the subsidies.

But prior to increasing the fuel prices, the government must impose budgetary discipline and improve the fuel distribution system, the Kadin said.

"Even though in the short term (higher fuel prices) would hit the business sector, there is no other choice but raise prices to reduce the (fuel) subsidy," MS Hidayat, chairman of the Kadin, said.

Hidayat made the remarks during a meeting to discuss Presidential Instruction No. 10/2005 on energy conservation.

Among those attending the meeting were Minister of Energy and Mineral Resources Purnomo Yusgiantoro and businessmen Sofjan Wanandi and Rachmat Gobel.

Hidayat said the government had to raise fuel prices to ease the burden on the state budget in financing the fuel subsidy.

"The government has adopted energy conservation measures but that will not solve the problem. The government is hesitant to raise fuel prices because it wants to avoid the ensuing political pressure," he said.

Purnomo sought the support of business community for energy conservation efforts.

“I already conveyed to you through micro as well macro perspective and I ask your wise understanding,” Purnomo said.

Purnomo said several things had to be considered before there could be any decision on raising fuel prices.

"For the time being, let us just follow the President's orders on energy conservation," Purnomo said.(godang/dino)