OIL PRICE INCREASE IN INDONESIA UNFAIR TO SMALL PEOPLE: OBSERVER.

JAKARTA, May 1 Asia Pulse - The Indonesian government's plan to raise fuel oil prices by an average 28.7 per cent next June is unfair to small people because it will be a hard financial blow to them, economic observer Ichsanuddin Noersy said.

"This reflects the government's unwillingness to work hard. If it handles fuel oil issues well, it can avoid losing funds. Raising prices will only harm the interest of small people," Noersy said in response to a reported government plan to raise fuel oil prices next June.

According to a finance ministry source on Tuesday night, the government was planning to increase fuel oil prices next June.

It was said that the price of premium gasoline would be raised from Rp4,500 (US$0.48) to Rp6,000 per liter, diesel oil from Rp4,300 to Rp5,500 per liter and kerosene from Rp2,000 to Rp2,300 per liter.

The source said with the proposed fuel oil price hikes the government would be able to save up to Rp25.877 trillion in fuel oil subsidy funds from the state budget

Noersy said that small people would bear the brunt of the oil price increases although the government would introduce various programs for the poor.

He said the subsidy program for the poor was temporary in nature while the impact of oil price hikes would be permanent. "The government should not announce the fuel oil price hikes at will," he added.