Page Nav


Gradient Skin



Responsive Ad

Indonesian regions were told to cut down on transportation costs to keep inflation down

Image: Reuters Berita 24 English - Indonesia's President Joko Widodo said on Wednesday that he had told provincial governments to use ...

Image: Reuters

Berita 24 English - Indonesia's President Joko Widodo said on Wednesday that he had told provincial governments to use their budgets to control transportation costs and stop inflation caused by last week's increase in fuel prices in Southeast Asia's biggest economy.

Widodo, also known as "Jokowi," raised the prices of subsidised fuel by 30% on Saturday. He did this because he was under pressure to control a growing energy subsidy budget. This led to protests all over the country of 270 million people.

"My ministers figured that inflation would go up by 1.8 percentage points. But that's if nothing is done. We have to step in, I don't want to do nothing "Jokowi said this about how fuel prices cause inflation to spread.

"Regional governments must act like they did during the pandemic," he said, adding that local leaders had been told to use their budgets to cover higher transportation costs, especially for getting basic foods like shallots and eggs to people.

Indonesia's inflation rate in August was 4.69 percent, which is close to a seven-year high and above the central bank's goal for the third month in a row. This is mostly because food prices are going up.

Later on Wednesday, the transport ministry said that starting September 10, minimum fares for app-based motorbike taxis will go up by up to 13.33% per kilometre to cover the higher cost of fuel.

Depending on the area of service, the ministry would also raise the minimum base fares for the first 4 km (2.49 miles) of travel by 13% to 31%.

In Indonesia, motorbike taxis are used a lot to get around and deliver goods through platforms run by companies like GoTo and Grab. Drivers have been trying to get their fares changed as costs have gone up.

A representative from the transport ministry said that the price changes only affected transportation services and not deliveries.

Jokowi called on everyone to work together to get through the energy and food crises that have been made worse by the war in Ukraine, which he said would continue to affect global supplies for a while.

Since he made his announcement, there have been protests, but the president didn't say anything about them. His ministers have tried to calm things down by saying that more money is being put into welfare programmes to make up for the effects of rising inflation.

Thousands of people protested across Indonesia on Tuesday against the increase in fuel prices, but analysts say that Jokowi has strong political support and will be able to weather the storm.

On Wednesday, there was a small rally outside the presidential palace in Bogor. In Aceh province on the island of Sumatra, police used tear gas to get rid of protesters.

Reponsive Ads