Price of diesel fuel, oil fuel to be raised to 50 percent of international price
Wednesday, May 23 2001 - 08:30 AM WIB
The government indicated Tuesday that the price of diesel fuel and oil fuel for industrial use could be raised to 50 percent the international price level.
Director general of oil and gas Rachmat Sudibyo said late on Tuesday that the price increase could start together with the 30 percent increase in the average price of fuel products sold to the general public at gas stations starting in the middle of next month.
Rachmat statement differs to an earlier remarks made by Minister of Mineral Resources and Energy Purnomo Yusgiantoro that the government planned to let the price of diesel fuel and oil fuel to be equal to the international price, which means that the government would no longer subsidize the fuel products.
Rachmat, speaking at discussion session, said that the new plan had yet to be discussed with the House of Representatives.
The government is under pressure to raise fuel price to reduce the costly fuel subsidy amid the threat of a greater state budget deficit this year. The government has announced that it plans to raise fuel prices by an average of 30 percent, and electricity tariff by 20 percent in the middle of June, and also to raise value added tax (VAT) to help limit the budget deficit at a safer level.(*)