Government Promises Lower Basic Commodity Prices

TEMPO Interactive, Jakarta:Prices of basic commodities are expected to go down when the subsidized oil prices are reduced next month. The basic commodities include rice, flour, soy bean, frying oil, eggs, chicken meat, beef, and chili. The Trade Department's Market and Distribution director, Gunaryo, said the price of basic commodities will depend on the public transportation. "There will be a decline in operational costs, so prices will decrease," he said yesterday. However, the transportation rates amount will depend on the distance of deliveries. The government previously planned to reduce the price of subsidized premium fuel oil on December 1, 2008. The Rp 500 reduction to Rp 5.500 per liter was because the world's oil price went down from US$ 147 to US$ 62 per barrel. Another price reduction will also apply for diesel fuel. However, some businesses have not yet confirmed the price reduction to customers. Bio-fuel Industry Association chairman Adiwisoko said he does not know how the reduced subsidized fuel oil prices will impact on the price of cooking oil. "However, this will definitely lead to an increase in the purchasing power of consumers," he said. Meanwhile Indonesian Flour Producers Association executive-director Ratna Sari Loppies said flour prices will not be affected by the reduction in subsidized fuel oil prices. "When fuel oil prices went up, the price of flour remained unchanged," she said. Ratna explained that the price of flour had gone down by 12 15 percent due to a decline in international wheat prices. Wheat flour prices from mills have gone down to Rp 6.000 per kilogram from the previous Rp 6.500. NIEKE INDREITTA