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Time to Buy a Motorbike

Government Preparing to Increase Gasoline Prices for Private Vehicles by 44%

(4/19/2013) The Indonesian government is planning to increase the cost of premium gasoline, possibly set to take place sometime in the month of May 2013.

Motorcycles and yellow-plated public transportation are slated  to continue to pay the current price of Rp. 4,500 per liter (US$0.45), while private vehicles will pay a higher price of Rp. 6,500 per liter (US$0.65).

While plans are being finalized on final implementation of the price hike, consideration is being given to separating gas stations eligible to sell gasoline to motorcycles and public transport and those designated to serve private vehicles.

Government officials are taking pains to point out that consumers paying the higher Rp. 6,500 per liter rate are still enjoying government subsidies as the market price of non-subsidized fuel is Rp. 9,500 per liter.

The final decision on the amount and date of the proposed price increase rests with President Susilo Bambang Yudhoyon.

The increase in fuel prices will undoubtedly fuel inflation. For this reason, the government is allowing the larger subsidy for motorcyclists and public transport in order to ease inflationary pressures on the lower socio-economic class. The government is also considering additional assistance in the form of subsidized rice and scholarship assistance for the poor.

The President is calling on all parties to help socialize the coming increase in fuel costs, educating the public on the details of the price hike and the absolute need to reduce the onerous size of government subsidies now being borne for fuel.