Fuel prices, Other Indonesia, Other China

BEIJING - Some of the people of Indonesia last week in Beijing, diligently listening to developments in the country being "broke down" due to the chaotic oil price hikes. "Approximately 1998 riots would like not yaa ....," said Siswanto, who was seriously watching developments in the country via internet television channels.

How not, various rumors ranging from a student who shot up the seven general officers who resigned, also accepted some of the people of Indonesia in Beijing.

Even though the House of Representatives plenary meeting decided to reject the fuel price hikes, demonstrations continue to occur not only in Jakarta but also in other cities in Indonesia. Damaged public facilities, students, community and even the officers involved are victims.

Than in China, especially Beijing, which has just raised its fuel prices back in six weeks, the planned rise in fuel prices in Indonesia is really a policy that was rejected by the "hard".

Both times

China, the largest oil user after the U.S., raised its gasoline and diesel prices the second time in less than six weeks. Premium prices rose 6.6 percent, or 0.44 yuan per liter, diesel rose 7.2 percent, or 0.51 yuan. The decision was taken following the rising prices of crude oil equivalent to Yuan-600 95 U.S. dollars per metric ton.

National Development and Reform Commission, China, Bappenas similar institutions in Indonesia, noting the price of three types of crude oil has risen disurveinya average of 10 percent. "It is important to ensure security of fuel supply China, by raising prices in the middle of planting season and the influx of stabilization in the Middle East," the NDRC official statement on Monday (3/19/2012).

Owner of the largest oil refineries in China, Sinopec and PetroChina, has urged the government raised fuel prices to match production costs incurred.

As a result of the increase, a few days later the price of vegetables in Beijing was creeping up. Not only that, starting this weekend residents also have to start paying a taxi is more expensive if traveling more than three kilometers. If previously they only pay 2 Yuan (the Yuan equivalent to Rp 1,450), now they have to pay about 3 Yuan. The policy other than in Beijing will go into effect in other cities such as Dalian, Kunming, Xiamen and Shaoxing. "We know fuel prices will rise, as is often reported to adjust oil prices. But still ..... our shock," said Huai (30).

Men are daily added to the taxi driver incomes are not rising, but the increase in fuel prices will inevitably follow the other.

Even so, the rise in fuel prices in China are valid March 21, 2012 is not accompanied by action of rejection especially large protests in Beijing or other cities. Everything went as usual with no turbulence. All are controlled by a centralized authority which is to maintain the socio-economic stabillitas.

Inflation

This is the second hike this year and comes as the government has more leeway to adjust the price level, while inflation eased from a three-year high in mid-2011. The Commission may adjust fuel prices when international oil prices move by more than four percent over a period of 22 working days.

Beijing to limit the increase in fuel costs to protect domestic consumers as international prices continue to climb. Inflation eased to 3.2 percent last month - the slowest pace since June 2010 following a series of rate hikes and monetary tightening measures by Beijing.

"Inflation appears to have eased, giving space to the second oil price increase (this year)," said Australia and New Zealand Banking Group in a research note Tuesday. "The direct impact of the CPI (consumer price inflation) will be handled at this stage."

China worried about spike in inflation carries the potential to trigger social unrest. Announced the latest fuel price hike, the government said it would offer subsidies to sectors such as agricultural mechanization and the taxi driver to reduce the impact. Inflation slowed during the last 20 months up to February last, make the Chinese government the confidence to raise fuel prices without affecting the level of purchasing power.

In February, China's inflation rate of 3.4 percent. The number is far taken the government's target of 4 percent. "It's a bold move of the National Development and Reform Commission ... inflation seems to fall quite sharply lately, so this policy is taken on the political situation right," said analyst Gordon Kwan of Mirae Asset Management in Hong Kong.

Skyrocketing prices, especially for food commodities and fuel, have previously led to rioting in several cities in China. Under the rules of China fuel price system, price of fuel for the local market can be changed when crude oil prices change more than four percent over a span of 22 days.

Government of Indonesia would have to have the calculations and careful consideration, to do the hike in fuel prices, but how to manage it so as not to make volatile situations is also important to do.