Indonesia calculating cost of keeping fuel prices unchanged – president

By Stefanno Sulaiman and Ananda Teresia

JAKARTA (Reuters) – Indonesia’s president on Thursday mentioned his authorities was calculating how for much longer it might maintain a coverage of conserving gasoline costs unchanged, whereas the central financial institution governor hinted at conserving charges regular at an upcoming coverage overview.

President Joko Widodo signalled earlier this week that the federal government was contemplating elevating gasoline costs. He has additionally repeatedly mentioned the vitality subsidy funds, which has been tripled to 502 trillion rupiah ($33.84 billion) this 12 months, is just too giant.

“That is such a big determine and we should know what that is for: to carry again a steep rise in inflation,” Jokowi, because the president is popularly identified, informed a nationwide coordinating assembly on inflation administration.

“However can the state funds be sturdy sufficient to proceed? We’re calculating,” he mentioned.

Inflation in Southeast Asia’s largest economic system rose to a seven-year excessive of 4.94% in July, as a result of rising costs of meals and a few non-subsidised fuels.

Officers with Financial institution Indonesia (BI) have performed down the rise in headline inflation stage, saying they like to find out financial coverage primarily based on the core inflation charge, which continues to be under 3%.

“We, in the meanwhile, don’t want to lift rate of interest due to the subsidies and meals administration,” BI Governor Perry Warjiyo informed a information convention after the coordinating assembly, repeating that he sees “no must rush to lift rate of interest”.

BI, one of some Asian central banks that has not lifted charges from pandemic-era ranges, is because of overview its financial coverage subsequent week.

In the meantime, the federal government is assured inflation will decelerate from the July excessive due to easing costs of foodstuff like beef, hen, sugar, shallot and chili, Jokowi’s chief financial minister, Airlangga Hartarto mentioned, predicting a spread of 4% to 4.8% for 2022.

Indonesia can also be contemplating limiting the quantity of people that obtain gasoline subsidies, the president mentioned in an interview with CNBC Indonesia earlier on Thursday.

Indonesians at present pay 7,650 rupiah per litre (about 52 U.S. cents) for subsidised gasoline, which authorities say is about 40% under estimated market worth, whereas subsidised diesel is offered at 5,150 rupiah (about 35 U.S. cents) per litre, lower than a 3rd of market worth.

($1 = 14,835.0000 rupiah)

(Reporting by Stefanno Sulaiman and Ananda Teresia; Writing by Gayatri Suroyo; Enhancing by Tom Hogue and Kanupriya Kapoor)