Subsidized fuel price hike will revive economic condition: Indonesian chamber

Subsidized fuel price hike will revive economic condition: Indonesian chamber

Suryo Bambang Sulisto. (ANTARA/Widodo S. Jusuf)

Jakarta (ANTARA News) - The Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Suryo Bambang Sulisto, said that the organization supports the governments policy to raise the cost of subsidized fuels.

He added that this fuel price hike would revive Indonesias economic condition.

"There will be adjustments in production costs and inflation hikes, indeed, but it is a necessary risk that had to be taken for the sake of our economy," Sulisto stated at the Presidential Palace here on Tuesday.

The price hike of Rp2,000 per liter of oil is still too low according to Sulisto, but he appreciated President Jokowis decision to decrease the allocation of fuel subsidy.

"The Rp2,000 per liter increase is acceptable for now. But why should people be made to feel the brunt twice? Why not go through with it (a significant fuel price hike) at one go? This is our (Kadins) opinion," he remarked.

Sulisto confirmed that the business sector was not surprised by the implementation of this policy as they had been asking the government to cut down fuel subsidies.

"We anticipated it long ago," he affirmed.

The Kadin chairman further noted that the budget allocated for fuel subsidies can be diverted to infrastructure development and peoples welfare, such as improving the education sector and creating jobs, which can boost economic growth.

The government of Indonesia officially raised the price of subsidized fuels by Rp2,000 per liter, effective Tuesday, November 18.

The price of petrol is now Rp8,500 from Rp6,500 per liter and that of diesel fuel is Rp7,500 from Rp5,500 per liter.

Bank Indonesia (BI) also decided to increase the BI Rate by 25 bps to 7.75 percent after it remained stable at 7.5 percent 13 months in row.

(Reporting by Muhammad Arief Iskandar/Uu.INE/KR-BSR/A014)