Monthly Archives: March 2012

DPR Votes On Fuel Subsidies

University of Indonesia students argue with House of Representatives security officers during a plenary session on the revision of the 2012 state budget early Saturday. The students were forced to leave the hall's balcony because they were interrupting the voting process. The House, through a dramatic voting process, agreed to increase subsidized fuel prices within six months if the Indonesia Crude Price (ICP) is 15 percent higher than assumed in the state budget. (JP/R. Berto Wedhatama)

Here’s a brief summary from The Washington Post of the what happened in the Indonesian parliament yesterday regarding the potential increase in fuel prices:

Indonesia’s parliament voted Saturday to block the government’s plan to raise fuel prices by more than 30 percent this weekend, but it allowed for a future price hike under certain conditions.

The government was set to raise the price of gasoline from around 50 cents to 65 cents per liter on Sunday. It says it has no choice but to cut budget-busting fuel subsidies, which have for years enabled motorists to fill up for roughly $2 per gallon.

The 550-seat house voted early Saturday to allow a price hike only if the average price of Indonesian crude in six months soars 15 percent above $105 per barrel, to $120.75 per barrel. The average price of Indonesian crude is now $116.49 per barrel.

In a plenary session marred by interruptions, heated debates and walkouts, 356 legislators voted to approve the conditional price hike, while 82 rejected it.

Led by the opposition Indonesian Democratic Party of Struggle, 93 lawmakers who reject any price hike at all stormed out as the vote was under way.

The vote came amid massive street protests in major cities against the plan, and more than 2,000 policemen and hundreds of soldiers guarded the parliament complex.

It will be interesting to see how this is interpreted going forward.  Was this a victory for the populist protesters or is the government just kicking the can down the road, delaying the inevitable?  Does it mark the hardening of lines between political coalitions, with members Hanura & PDI-P walking out on the vote?

According to Detik.com, both the metal workers union (Federasi Serikat Pekerja Metal Indonesia – FSPMI) and opposition parties are planning on challenging the constitutionality of the decision in court.

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Said Iqbal On Fuel Subsidy Protests

Here’s a quote from Said Iqbal in The Jakarta Post‘s coverage of the fuel subsidy protests:

“We come here to urge the House to reject the government’s proposal of increasing the fuel prices on April 1 and the power tariff price on May 1. We come here to give moral support for lawmakers to channel the people’s opposition to the planned fuel price increases. We are here to back up lawmakers from the PDI-P, Golkar, PKS, Gerindra and Hanura to channel our aspirations,” he said.

He called on lawmakers to no longer remain loyal to their own political parties, which he said have been inattentive to the real conditions people face at the grass-roots level. “Lawmakers should fight for a ‘one man, one vote’ mechanism in the planned vote for the proposed revision of the 2012 state budget law.”

Fuel Prices Become Focus Of Labor Protests

From The Jakarta Globe:

Indonesian labor unions have threatened to shut down public facilities if the government goes ahead with planned cuts to fuel subsidies.

“If the government continues with the fuel price hikes, labor unions across Indonesia will close down public facilities such as toll roads and airports,” the president of the Confederation of Indonesian Labor Unions, Said Iqbal, said in Jakarta on Wednesday.

Jakarta’s Tanjung Priok port and Indonesian refineries would also shut down, Said said.

Laborers are also planning to raid trucks carrying fuel tanks, he added.

Indonesia’s labor unions plan to hold rallies across Java, including one before the House of Representatives office complex in Jakarta on March 27, Said said from the sidelines of a Wednesday rally in front of the Presidential Palace in Jakarta.

Tens of thousands of workers from at least three labor unions held a march from the Hotel Indonesia traffic circle to the Presidential Palace Wednesday afternoon. Blue collar workers will be among those hit hardest by the government’s plan to raise the price of fuel from Rp 4,500 (50 cents) to Rp 6,000 per liter on April 1, Said said.

Laborers recently enjoyed a 20 percent increase in pay. It is unlikely their salaries will increase again after the fuel hikes, he added.