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Indonesia fuel price hike in effect from 1 April

March 15, 2012


"TERROR" plan to raise fuel prices continue to come on April 1, bringing fear to the people of Indonesia. Not after the demo and protests continue to roll over the plan, the issues continue to rise in the price range bermuculan.

Like a snowball, the issue of rising prices continued to roll, can not be dammed, getting bigger and the resulting turmoil deepened for the people of Indonesia.

During the planned increase in fuel is kept rolling during which the people of Indonesia will face a series of economic shocks due to the impact of the inevitable.

The effects of the planned increase in fuel prices is spreading to all sectors of life and systemic impact. Moreover, the most affected by the economic, social and cultural rights, both macroeconomic and microeconomic sectors. Effects of the planned increase in fuel economy will be felt with increasing macro-inflation.

Governor of Bank Indonesia, Nasution, said that if the fuel price hike plan approved 1 April next, then the inflation by April 2012 this figure will reach 7.1 and even 7.8%.

Yet according to data from Bank Indonesia, inflation in February 2012 and only reached 3.56%. This means that the fuel price hike will raise the inflation rate reached more than 4% or twice the previous rate of inflation.

The increase in inflation was also ultimately affect the level of Gross Domestic Product (GDP) of Indonesia. Reflecting on the fuel price hike in 2005, an increase in inflation due to rising fuel prices make Indonesia's real GDP is only a slight increase from the previous 0.041 to just 0.051.

The reason is that a range of economic society, the lower and visible from the reduction in household consumption. Most likely, the same thing that happened in 2005 will again be felt this year.

Besides the impact on macro-economic sector, recana increase in fuel will also affect the micro-economic sectors. Micro-economic sectors that most of the actors are little people that will most feel the impact of this increase.
One is for transportation and freight activities. The transport sector is probably one of the sectors most directly feel the bitter pill of this fuel price hike. Given to date fuel is still the primary fuel transport Indonesia.

According to data from Agency for Development and Assessment of Technology (BPPT), the use of fuel in Indonesia until 2014 trasnportasi you reach the 95% that of petrol (gasoline) and diesel. The rest is natural gas (CNG) and biofuels little.

The fuel price hike will certainly raise the cost of transport, particularly transport rates. Freight rate increase this certainty has been confirmed directly by the Chairman Organda said that due to this rise in fuel prices, freight rates would be raised to 35% even more than that.
This freight rate increase is not inevitable, let alone the price of maintenance and spare parts are also bound to increase.
Ironically, mass transportation and transit users are mostly small people.

The increase in freight rates was also felt by the farmers, small manufacturers, home industry and traditional markets. Because the accommodation and their trading activities performed daily by using mass transportation and the transportation of goods.

If the main transport of farmers, producers, and traders are up, then the options that they will do is to lower production costs or increase the selling price of their merchandise.

However, the first option with lower production costs it is almost difficult, even impossible. Given the economic conditions of farmers, home-based producers and small traders away from ketercukupan.
Means to suppress the production costs are the amount of commodities they are going to sell. Thus, it will also reduce their acceptance. Finally, raise the selling price of the option can no longer be denied.

This price increase will attack the basic materials of everyday, such as rice, sugar, eggs, chili, and other basic food ingredients. Soaring prices of basic necessities is already happening even before the planned increase in fuel is passed by the House.

In various regions of the country, the prices of basic commodities in the traditional markets continue to crawl up, as the price of eggs has gone up to Rp 2.000/kg, which reached Rp 6.000/kg rice, and peppers are even in some areas in Indonesia have increase of 100%.

Conditions of the soaring prices of basic commodities will be greatly felt by the small community, because most of the commodities sold by farmers, producers, and traders will be sold in traditional markets.
As a result, traditional markets after the increase in fuel is no longer going to get along with people, given the prices that are no longer affordable.

Purchasing power would be weakened because of the declining coverage of their economies to buy essential goods to meet their basic needs.
Let alone to consume 2100 calories per day as the standard criteria of the poverty line per day, consume rice as a carbohydrate source would be very difficult for poor people.

Meanwhile, the compensation plan will be provided by the government to the people of Rp 150.000/bulan it actually rejected by the people because they prefer not rising fuel prices.

Compensation enjoyed only 8 months, while the impact of fuel price rises could be many even during the current year.

If the purchasing power declined due to rising prices of basic needs, then the parties most directly affected is a manufacturer, seller, and have a direct impact on their income. Worse, if then they have to close their business due to losses can no longer be covered.
Once the extent of the impact of fuel price increases, even to touch the lowest unit of the structure of the republic. Ironically, the conditions that will occur later, the government has released her hand and consider the situation just fine and run according to the order.

In fact, the little people who should be protected by the constitution and the country who will fall victim to this unilateral policy.

If the government raised fuel prices, that means the government against the state and against kosntitusi, and the most important pillars crippled economy, the traditional market.

And where they hide and hope the people's economy will grow? It is clear that the increase in fuel just to be 'debilitating' structural economic order of a small community!.

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