Secretary General of the All Indonesian Workers Association (OPSI) Timboel Siregar said here on Saturday that following the House of Representatives (DPR) decision to insert a clause in the Revised 2012 Budget Law, cases of subsidized fuel oil hoarding were expected to increase.
The DPR on Friday held a plenary session to consider a government proposal to raise fuel oil prices on April 1, 2012. The House voted to insert a 6a clause in Article 7 of the 2012 Revised Budget which gives the government the authority to make a price adjustment, or price increase, if the Indonesian Crude Price (ICP) increased or dropped by 15 percent during the current six months from the assumed price in the state budget.
"This will obviously trigger acts of hoarding because speculators will wait since prices will increase after six months and this will create a disadvantage for the people," Siregar said.
According to the OPSI secretary general, the insertion of the additional clause should be canceled because it contradicts the 1945 Constitution. The cancellation of the decision is also expected to provide certainties if the present subsidized fuel oil price of Rp4,500 per liter is maintained.
It is believed that if the price of fuel is set, speculation could be prevented.
"The 6a clause will continue to create concerns for the people. This will become a main reason for people to speculate more on prices that would, in the end, trigger inflation," he said.
In the meantime, after following the debate in the plenary on the Law on 2012 Amended State Budget, as well as the decision on a new formulation of Article 7 Paragraph 6a, the government agreed to abide by the decision, Finance Minister Agus Martowardojo said.
According to the head of the Fiscal Policy Commission of the Finance Ministry, Bambang Brodjonegoro, the decision will not lead the government to increase the price of subsidized fuel on April 1, 2012.
He did say that the government could adjust the price of fuel if the IC of oil increased or dropped 15 percent of the assumption set in the 2012 Amended State Budget at 105 US dollars per barrel.
Therefore, the subsidized fuel price hike will be postponed since, in the last six months, ICP oil price has not deviated by 15 percent.