By Bambang Purwanto

Jakarta - The Indonesian government finally announced an increase in fuel oil prices despite strong protests from different organizations in the country.

On the occasion, the government also announced its decision to provide direct cash assistance to low-income families who will be affected by consequences of the government's measure to raise fuel oil prices.

The government's decision on the fuel oil price hike was an attempt to reduce the state budget deficit caused by the soaring world crude oil prices.

The price of world crude oil has reached a record high of US$130.47 per barrel on Wednesday (May 21), 2008.

Energy and Mineral Resources Minister Purnomo Yusgiantoro announced here Friday evening the increase in fuel oil prices starting at midnight today.

Present at the function announcing the fuel oil price hike were Finance Minister Sri Mulyani, Social Affairs Minister Bachtiar Chamsyah, Trade Minister Elka Mari Pangestu, Industry Minister Fahmi Idris, Coordinating Minister for People's Welfare Aburizal Bakrie and Communications and Informatics Minister Muhammad Nuh among others.

The minister said the government increased the price of premium gasoline from Rp4,500 to Rp6,000 per liter, diesel oil from Rp4,300 tp Rp5,500 and kerosene from Rp2,000 to Rp2,500.

With regard to the direct cash assistance, Social Affairs Minister Bachtiar Chamsyah said the government would start distributing  cash assistance to 844,130 poor families in the first 10 areas in Indonesia on Saturday (May  24), 2008.

"Tomorrow (Saturday, May 24) the cash assistance would be disbursed in Medan, Palembang, Jakarta, Bandung, Semarang, Surabaya, Yogyakarta, Makassar, Kupang and Banjarmasin starting at 10 a.m.," Social Affairs Minister Bachtiar Chamsyah said here Friday.

The government has allocated Rp14,1 trillion for a cash transfer program for some 19,1 million low-income families across the country. Each family was expected to receive Rp100,000 per month in 18 months.

As a logical consequence of the government's announcement on the fuel oil price increase, motorists in many parts of the country rushed to gas stations in long lines for gasoline while they still have a chance to get gasoline before the prices are raised.

However many of the motorists after queing in the long lines became disappointed after the gas station attedants told them that gasoline is finished.

People including workers have been planning to take to the streets in protest over  the government's decision to increase fuel oil prices. 

Manpower and Transmigration Minister Erman Suparno  meanwhile called on workers planning to stage massive demonstrations on Monday (May 26) against the government's decision to raise fuel oil prices to keep their rallies peaceful and non-violent.

"The government cannot ban demonstrations because the workers have the right to hold them. But I appeal to them to conduct their rallies in a peaceful way and to refrain from anarchic acts," the minister said here Friday.

Earlier, the All-Indonesia Confederation of Workers Unions (KSPSI) said in a press release it will launch nation-wide worker demonstrations to reject the government's plan to raise fuel oil prices soon.

The instruction to hold the rallies was issued to the confederation's members throughout the country by KSPSI Chairman Jacob Nuwa Wea last May 19.

In Jakarta, workers from Jakarta, West Java and Banten would gather outisde the State Palace in Central Jakarta, and in the regions  they would converge in front of the offices of  the respective governors, district heads and  mayors.

The KSPSI leadership promised the rallies would be conducted in an orderly manner, peaceful and non-anarchic behaviour.

The confederation said it also objected to the government's direct cash assistance (BLT) program for the poor because the handouts were not "educative" and could trigger social conflicts.

KSPSI Vice Chairman Mathius Tambing said the data to be used for distributing the BLT assistance  were no longer appropriate as they had been collected in 2005.

Tambing also cast doubt on the credibility of a reported promise by the Indonesian Businessmen's Association (Apindo) to raise  workers' transporation and food allowances after the fuel oil prices had been raised.

"The promise is just a cover because the companies will also bear a heavier burden following the fuel oil price hikes. In fact, what we fear will happen is  workers' layoffs," Tambing said.

Minister Suparno said it was the workers' right not to believe in  Apindo's commitment. "A fact is that Apindo, without my asking,  came to me to declare their resolve not to lay off any worker and their plan to raise workers transportation and food allowances," he said.

Apindo had called on  members who are facing difficulties by the fuel oil price hikes to increase efficiency, reduce working hours, overtime work and work shifts or tell workers to stay home but to continue paying their wages.

"Let us see whether or not the businessmen will keep their promise," Suparno said, adding he was optimistic they would.

In several areas in Jakarta, people stage rallies against the government's decision to increase  fuel oil prices but the police managed to handle them and the situtaion was under control.

It was earlier reported that the House of Representatives (DPR) cancelled its plan to invite President Susilo Bambang Yudhoyono to a  meeting to discuss the government's planned increase of fuel oil prices.

Following the House leaders' opposition to the plan last week, House Speaker Agung Laksono said the Legislative Assembly planned to invite the president for a clarification of the government's plan to increase fuel oil prices and the head of state was  ready to meet the request.

Data available at the Finance Ministry showed the fuel oil prices in Indonesia are among the lowest in the world.

In Indonesia, the per-liter prices of premium gasoline, diesel oil and kerosene are US$0.49, US$0.47 and US$0.22 respectively compared to US$0.87, US$0.86 and US$0.86 in Vietnam.

In East Timor (Timor Leste), the per-liter prices of premium gasoline, diesel oil and kerosene are US$0.87, US$0.86 and US$0.86 respectively. - Source : Antara News Agency, 24 May 2008