Name: Rahadiyan Dewangga Prawira Wisesa

NIM : 13007052

THE INCREASE OF FUEL PRICES

The issue of fuel prices increase has been a main topic to discuss

everywhere. Since last year, the governments have socialized this

decision through mass media. Actually, the governments have planned

to announce and apply this decision in January, 2005 but it was

delayed because of the suffering of Aceh and West Sumatera people.

The governments-in that moment-had to think twice to run that

decision.

Concerning this issue, as a college student, we have to be realistic

in facing those statements. We must not blame any side or anyone

without consider the reason of raising those fuel prices. Therefore, we

have to support governments who apply this policy. Analyzing this

case holistically, we have to affirmative this because of some aspects.

They are cultural aspect, financial aspect, and management aspect.

The main reason why we have to reconsider to disagree with the

“fuel price increase” policy is the cultural aspect of Indonesian people

itself. Fuel subsidies is such a bad idea, it makes Indonesian people

tend to be dependant in those subsidies. Based on Google searching

result, it was “fuel subsidies” which made our country be the last one

who escaped from the monetary trap in last 90’s. Fuel subsidies

contribute either to make our APBN is less competitive than others oil

producer countries.

Oil fuels, natural gas, and coal are fossil fuels. Fossil fuels are kind

of non-renewable energy resources. Consequently, those resources will

sometime run out while following the Be-kt function. Therefore, the fuel

prices will always go upward because of the energy crisis. It is a very

common phenomenon, based on Karl Marx’s statement about

economic law, less supply will affect the price of the commodity itself,

less supply means higher price. Concerning this situation, as the time

goes, fuel subsidies will emphasize the stress in our country APBN.

Fuel subsidies make our mass transportation infrastructure less

competitive than others. This make people tend to use private

transportation than public one because of their mindset of buying the

same price of fuel and paying for public transportation. So, all big cities

will experience a hectic traffic. It is one of energy wasting source.

People in Indonesia do not have the ability to predict bad thing for

them, especially long-term effect. Most of them demand fuel subsidies

to the government but they do not really understand that those

subsidies will stress them in the last. It is true that the “fuel subsidies

abolition” policy will make all commodities prices inflate in short-term.

But, we have to reconsider; it is wise if we try to reallocate the portion

of fuel subsidies to education, small business infestation, or

infrastructure development. In long-term, this fuel subsidies

reallocation will have a good effect to our people than maintain certain

level for fuel subsidies.

Thus, I think it is better for us not to be too demanding in facing

this problem. The governments have tried as hard as they can to solve

this case. What we have to do now are supporting the policy and

making an effort to find the best solution for the sake of our country.