Jakarta (Antara Bali) - Coordinating Minister for Economy Chairul Tanjung has said the new government under (president elect) Joko Widodo (Jokowi) is expected to raise the prices of subsidized oil fuels next month.
"Information I have from the economic team of the next government, thanks God, that they will raise the price of BBM in November," Chairul said after attending a ceremony of the National Economic Committee on Economic Prospects , 2015 here on Friday night.
With the price hike, the use of BBM is expected to decline that the consumption of both premium gasoline and diesel oil would not exceed the quota of 46 million kiloliters for this year, he said.
"Demand for subsidized premium gasoline and diesel oil would decline," he said.
He said if the BBM prices are raised, the new government is the one to make program of compensation for the economic and social impacts.
The present government will only allocate a compensation fund of Rp5 trillion in the revised 2014 state budget, he added.
Jokowi, who is to be installed on Oct 20 has indicated plan to raise the price of subsidized BBM, but he had not given figure or time .
"It is still being calculated and the time is yet to be fixed," Jokowi once said.
Some economists said it would be better if Jokowi raised the prices before the end of this year to show to the market the commitment for structural reform.
Chief economist of Bank Mandiri Destry Damayanti said delaying plan to raise the BBM price until 2015 would create negative sentiment.
Destry said there would be short term negative impact if the BBM prices are raised in November, but long term positive impact would began in 2015.
She said the short term impact is on inflation but long term impact would be healthy beginning in 2015.
She said inflation and current account deficit would be more under control in 2015 if the prices are raised this year.
The government would save up to Rp141 trillion in a year if the BBM prices are raised by Rp3,000 per liters in November 2014, she estimated.
The short term impact is that inflation could surge to 8.47 percent in 2014 on year and economic growth could fall to 5.23 percent from earlier target of 5.3 percent, she said.
"However, if the prices are raised in 2014, inflation could be kept lower at 5.22 percent and current account deficit would also decline in 2015," she said. (WDY)
COPYRIGHT © ANTARA News Bali 2014
"Information I have from the economic team of the next government, thanks God, that they will raise the price of BBM in November," Chairul said after attending a ceremony of the National Economic Committee on Economic Prospects , 2015 here on Friday night.
With the price hike, the use of BBM is expected to decline that the consumption of both premium gasoline and diesel oil would not exceed the quota of 46 million kiloliters for this year, he said.
"Demand for subsidized premium gasoline and diesel oil would decline," he said.
He said if the BBM prices are raised, the new government is the one to make program of compensation for the economic and social impacts.
The present government will only allocate a compensation fund of Rp5 trillion in the revised 2014 state budget, he added.
Jokowi, who is to be installed on Oct 20 has indicated plan to raise the price of subsidized BBM, but he had not given figure or time .
"It is still being calculated and the time is yet to be fixed," Jokowi once said.
Some economists said it would be better if Jokowi raised the prices before the end of this year to show to the market the commitment for structural reform.
Chief economist of Bank Mandiri Destry Damayanti said delaying plan to raise the BBM price until 2015 would create negative sentiment.
Destry said there would be short term negative impact if the BBM prices are raised in November, but long term positive impact would began in 2015.
She said the short term impact is on inflation but long term impact would be healthy beginning in 2015.
She said inflation and current account deficit would be more under control in 2015 if the prices are raised this year.
The government would save up to Rp141 trillion in a year if the BBM prices are raised by Rp3,000 per liters in November 2014, she estimated.
The short term impact is that inflation could surge to 8.47 percent in 2014 on year and economic growth could fall to 5.23 percent from earlier target of 5.3 percent, she said.
"However, if the prices are raised in 2014, inflation could be kept lower at 5.22 percent and current account deficit would also decline in 2015," she said. (WDY)
Editor : I Gusti Bagus Widyantara
COPYRIGHT © ANTARA News Bali 2014