Scrapping Subsidies

This April, as set out in the 2001 state budget, the government will raise fuel prices by an average 20 percent. Where will the extra cash go?

February 27, 2001

It is an unpopular decision but the government is firm in its stance to raise fuel prices by an average 20 percent in April. Though it may find itself like someone thrown into a cul-de-sac, the government can do nothing else but raise fuel prices to reduce its budget burden. Canceling the hike would be tantamount to deferring a defeat. If fuel prices remained at the present level, the government would have to fork out Rp45.7 trillion in subsidies...

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