Prices of goods and services to increase by 0.3% due to fuel price increase

The prices of goods and services are projected to increase by about 0.3 percent in response to the planned increase of fuel prices, and therefore the government will increase the level of subsidies for poor people, according to the National Development Planning Board (Bappenas).

Bappenas chairman Djunedi Haidumarto said to compensate the price increases, the government would extend an additional Rp 10,000 to its subsidy allowances to poor families to a total of Rp 50,000 per family per annum.

"The master plan for fuel subsidy has been completed. We have found a new scheme that differs with the previous scheme. We call it a compensation not a subsidy," Djunaedi said at a hearing with the House of Representatives' Commission IX on banks and finance.

The level of the compensation, Djunaedi said, was calculated based on the prices of goods and services that were projected to increase in response to the fuel price increase.

"We will socialize this scheme starting in July. It is expected that in October, poor families could already get their rights as fuel prices will have been raised by then," he said.

Djunaidi said a total of 17.4 million poor families will be entitled to the government's compensation. Families entitled to the compensation could withdraw the fund from nearby post offices by showing their identity cards. (*)