"Discussions on a fuel price hike have been going on for the last two years and in fact many have already calculated them into the prices of their products," he said.
Kreshna noted that the increase in fuel prices by Rp1,500 according to earlier estimates will cause an increase in prices of other goods.
"For example if the fuel price rose to Rp6.000 it will automatically increase prices of other goods," said Kreshna.
He said the subsidized fuel price hike is almost certain to affect all levels of the society, and becomes a political issue.
Besides the fuel subsidy also burdens the state`s budget, Kreshna added.
"Why do we always have a deficit, it is because we must re-import our fuel components perhaps due to our inefficient processing management," he said.
Apart from that the use of budget for buying unnecessary items has also significantly contributed to creating the budget deficit.
Kreshna also added that an increase in the subsidized fuel prices will affect inflation in 2013.
"The fuel issue will certainly affects inflation and a 5.3 percent rate may be reached or exceeded a little," said Kreshna.
(A050/H-YH)
Editor: Jafar M Sidik
Copyright © ANTARA 2013
