Any lingering celebratory spirit marking the start of the New Year may have been extinguished, in part, by price hikes introduced by the Government for electrical power, telecommunications and fuel prices.
On midnight of the first day of the new year substantial fuel price hikes were introduced at the State oil company - Pertamina's gas pumps. Claiming higher world-wide crude oil prices blamed on continuing civil strife in Venezuela and the lingering threat of war in the Middle East together with the removal of government subsidy programs, a liter of premium now costs Rp. 1,810 (approximately US$ 0.21); diesel fuel Rp. 1,890; and kerosene for industry Rp. 1,970.
The old price for premium fuel stood at Rp. 1,750, with the new price representing an increase of 3.4%. The largest increase in fuels costs will be felt for diesel up 22-23%; and kerosene for industry up 29%.
Base electrical rates are also expected to increase in 2003 at an average 24%, causing the manufacturing sector to express their concerns over the long term competitive viability of producing goods in Indonesia. Electrical costs will also prove especially burdensome on Bali hotels expecting very low occupancy rates over the first quarter of the year in an industry still trying to shake off the lingering effects of last October's bomb attack.
As a palliative, the Government has promised to introduce the 24% increase in a phased manner, promising a hike of only 6% in the first quarter of the year.
Higher Local Phone Costs As Well
A chat with your neighbor on the phone will also cost substantially more in Indonesia in 2003. Local calls now cost 31% more while long distance charges will, in fact, be reduced 3.9%.
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