Prices of Goods Rise ahead of Fuel Hike

TEMPO.CO, Jakarta - Sofjan Wanandi, chairman of the Indonesian Employers Association (API), said businesses have anticipated the government's plan to raise subsidized fuel prices. Since September, he said, most businesses have raised their product prices gradually.

Sofyan said product prices will be raised accordingly with the amount of fuel price increase. If fuel prices rise by Rp1,000 per liter, product prices will be raised by one percent. A Rp2,000-hike in fuel prices would lead to product prices raised by two to three percent, and if fuel prices are up by Rp3,000, the prices of goods will be raised by four to five percent.

"We will adjust [price increases] with the actual [fuel] price hike. If it is too high, we will lower them," Sofyan said Wednesday.

Sofyan projected that in the first three months after the hike there will be a decline in consumption rate. It would be impossible to save the industry by raising product price if not coupled with efficiency efforts.

Coordinating Minister for the Economy Sofyan Djalil said the government is preparing social assistance program to bumper welfare disparity that might come from the fuel hike. These programs are the Kartu Indonesia Sehat for healthcare, Kartu Indonesia Pintar for educational assistance, and the Kartu Keluarga Sejahtera to help with family welfare.

DINI PRAMITA | SUNDARI | ARTIKA RACHMI FARMITA