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Article: Increases in fuel prices, inflation rates and interest rates.(FOCUS)
- Article from:
- Indonesian Commercial Newsletter
- Article date:
- May 1, 2008
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The new surge in the prices of crude oil hitting an unprecedented level of more than US$130 a barrel has forced the government to break its earlier promise not to raise the fuel prices (BBM) this year.
The 2008 state budget, after repeated revisions, was calculated on an assumption that the oil price will average US$ 95 a barrel. Based on that assumption, the subsidy on fuel prices is Rp 126 trillion.
However, the prices of crude oil has continued to scale up and in May it crossed the level of US$ 130 a barrel. Without raising the fuel prices, the subsidy will swell to Rp 190 trillion. The subsidy would have widened the already large budget deficit that ...