The Government Must Be Alert, Implementing Fuel Prices Can Influence Economic Growth And Inflation

Caring for fuel prices can affect economic growth. (photo: doc. between)

JAKARTA - Indonesia's improving economic growth and controlled inflation could be disrupted by the policy of raising fuel prices by the government, Saturday, September 3.

The government is also asked to be aware of the impact of the adjustment of fuel oil prices (BBM) to economic growth, because currently Indonesia is still in the recovery period due to the impact of the COVID-19 pandemic. Universitas economist Brawijaya Nugroho Suryo Bintoro in Malang City, East Java, Saturday, September 3 to Antara said that one of the things that needs to be anticipated from increasing fuel prices is the target of economic growth, because this policy can hinder people's consumption. "For problems that must be anticipated is related to the target of economic growth, because it is very likely to become a threat. Currently, we are still in a condition of recovery (due to COVID-19)," Nugroho said. Nugroho explained that users of BBM subsidies of type pertalite, diesel and non-subsidized types, currently the majority are middle class people and also lower middle class people. "The middle class economic community that restrains consumption needs to be watched out for. Because this is no longer the consumption of food, but we are talking about the secondary and tersier sectors that have a lot of added value," he said. He also added that one sector that would be disrupted due to the increase in fuel prices was the sale of used motorized vehicles. In addition, he continued, the tourism sector was also affected by fuel price adjustments. People who will carry out recreational activities will withhold their expenses in tourist destination areas due to the impact of rising travel costs from tourist agents. "This series will then cause economic growth to be disrupted, while we are still in a recovering condition. This is also dangerous," he said. According to Nugroho, the follow-up impact due to fuel price adjustment is an increase in the price of a number of basic commodities because distribution costs have also increased.

"The distribution process will continue, which is a question whether the increase in fuel will also affect the final selling price of these important commodities," he said. In addition to pertalite, diesel fuel also experienced price adjustment, from Rp. 5,150 per liter to Rp. 6,500 per liter. price adjustment from Rp. 12,500 per liter to Rp. 14,500 per liter.