Anyhow, the point of this article is that by not creating a viable method of alternative (off-road based) transportation, the government is trapped in this vicious cycle of having to provide fuel subsidies, which in turn encourage people to actually waste fuel. Not to mention corruption, etc -- all the usual suspects.
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The Gas-Guzzling Public Shares Some Blame in Need for Fuel Price Increase
Yohanes Sulaiman | March 19, 2012
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| 'Short-term aid doesn’t address the underlying problem of Indonesia’s fuel addiction.' |
Should everything go as planned, the price of the subsidized gasoline will increase on April 1. Such a price increase, while understandable in light of uncertain global oil price thanks to ongoing crisis in the Middle East, was badly managed and planned.
Listening to the speeches in which the planned price hike was justified, however, I realized that this was the first time the government has faced global oil price instability that forced it to increase the price of fuel.
A few years back, before the global economic crisis, the world saw the price of oil jump to $147.30 per barrel in July 2008. At that time, the price of subsidized gasoline was increased to Rp 6,000 (66 cents) per liter. Back then, it was argued that the subsidized fuel was killing the economy by draining the treasury and that the government needed to reduce the subsidy in order to spend the money on much-needed infrastructure and improving Indonesia’s fuel economy.
It made economic sense as much back then as it does now. Rather than waste money on subsidizing fuel prices that do nothing but encourage the public’s wasteful use of fuel, it is much better to slowly reduce and phase out the subsidies, forcing the public to actually limit its fuel consumption by buying fuel-efficient vehicles and maintaining its vehicles regularly.
The caveat, however, is that the government must improve the public transportation system, providing an alternative method of travel to the public, thus encouraging it to switch to this fuel-efficient method of transportation that is also affordable. This switch will help reduce the number of vehicles on the street and thus alleviate traffic jams and minimize the amount of gasoline wasted by cars sitting idle in the middle of gridlock.
Yet, apparently nothing was learned back then.
There have been only a few attempts to wean the nation from its oil addiction. The gas-guzzling old trucks belching a cloud of smoke from their exhaust pipes, with so much pollution that would make a coal-fueled power-plant blush, remain a common sight. Traffic remains terrible, with no alternative transportation method such as a monorail or subway being built that would reduce the number of cars on street.
Instead, the government relies on the TransJakarta busway system that reduces the number of lanes on the road and further exacerbates the traffic jams. This system also remains so unreliable — with tales of hours of fruitless waiting, pick-pocketing and sexual harassment — that the public no longer think of it as an attractive alternative method of transportation.
People instead spend their paychecks to purchase motorcycles that further add into national fuel addiction and taxing the already-burdened transportation network that is strained to the brink of collapse. Some transportation analysts are already sounding warnings that by 2014, traffic in Jakarta will grind to a halt with the roads completely filled with idling vehicles.
This time, the same excuse is again used, that the public needs to sacrifice its money to maintain the health of the state budget. The public, however, is skeptical about whether the increase is needed and if it can even believe that the government acts with the public’s best interests in mind. The government seems without any sense of urgency.
Lawmakers enjoy their time sitting with chauffeurs in their gas-guzzling vehicles at the taxpayers’ expense. Mini-Gayuses remain at large, helping themselves to the taxpayers’ money, and ministries funnel the money to the political parties, current developments in the courts seem to suggest.
How healthy is the state budget, anyway? While the spending on infrastructure was finally increased this budget year, the increase remains pale in comparison to the sheer size of the country and the amount of rupiah actually needed to overhaul the dysfunctional transportation system. As a result, infrastructure remains in shambles, which exacerbates traffic jams, further adding to the cost of transportation in Indonesia and doing nothing to increase the fuel economy.
Worse, in order to blunt public criticism, the government has also engaged in another misguided short-term policy of handing out cash payments to the poor (BLT). This bribe to the people will do nothing but give the people reason to expect a government handout every time things don’t go well.
There are also some questions to be asked, such as who qualifies for such assistance and whether there are safeguards to prevent the money from being given to those who do not deserve it, like the cronies authorized to distribute the money. BLT opens the door to illegal fees on the aid by corrupt local government under the guise of administrative costs, and even corruption within the bureaucracy itself.
More importantly, such short-term aid doesn’t do anything to address the underlying problem of Indonesia’s fuel addiction. There aren’t any reliable methods of transportation, aside from the gas-guzzling personal vehicles, due to the lack of investment in a functioning public transportation system.
Could the public be blamed then for questioning the wisdom of this increase of fuel price? Not surprisingly, many have called for the government to — instead of raising the fuel price — fix its own dysfunctional behavior first by cracking down on government corruption and waste that drain the treasury on a much larger scale than the fuel subsidies.
It is clear that the good times cannot continue and that sooner or later the public will have to take the bitter pill of a fuel price increase, and that the country has to be weaned off of its fuel addiction. The government has the responsibility to ensure that the public has an alternative in the form of a cheap, reliable and efficient public transportation system that will improve overall fuel economy. The government also must show that it does take seriously the fuel price hike issue, as well as the widening state budget deficit, by curbing the governmental waste and forcing bureaucrats and lawmakers to use cheap and fuel-efficient vehicles.
The government has already had a master plan to improve the strained transportation system developed by the National Development Planning Board (Bappenas). It is time to muster enough political will to implement it and not allow money to be funneled away through corruption and vested interests.
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colroe
11:54am Mar 19,
2012
Maybe there could be a campaign to have vehicle owners ensure their drivers switch off the air conditioning in the car while the "boss" is busy. Also teach the public who own diesel vehicles that a modern diesel engine does not need half an hour of idling (warming the engine) before the journey.
Serigala-Berbulu-Domba
9:21pm Mar 19,
2012
The Governments approach to addressing this issue has involved a lot of handwringing over a long period of time, when an incremental fuel subsidy reduction program should have been implemented long ago. Instead, successive Governments have adopted a stop, start approach to this issue, when firm resolve should have been applied to address this issue on a systematic basis. This has resulted in the current situation of the fuel subsidy amounting to approximately US$20 billion, a clearly unsustainable position. The proposed April 1, 2012 increase in the price of premium gasoline of Rp1,500 per litre will be a start in addressing the current situation, but further increases in subsidized fuel prices will be required in future to further reduce the massive fuel subsidy amount in order to provide funding for infrastructure, education and other much needed social programs.
Uninfomed observations recently expressed by PDI-P, DRD and PKS representatives on this issue are totally irresponsible.
Roland
12:24am Mar 20,
2012
IN regards of a completely clogged Jakarta by 2014 - what actually happened to the initiative to replace the completely inefficient "3 in 1" system with a inner city toll? I thought it will take place this year but it seems that it was just another castle in the sky. Same as the emission stickers which are supposed to be on every car with a Jakarta registration...never heard of again after its introduction.
ANd yes, 'colroe' it is obvious that a lot of gasoline is getting wasted with idling cars "just" to run the air condition - but on the other side I remember one idiotic rule connected with the "3 in 1" system, which officially requires all cars to have their windows lowered during its duration in the morning and afternoon, so law enforcement officers can see the inside of the car and its passengers. Personally I wouldn't mind at all to switch to a hybrid or natural gas powered car, but there are not even refueling stations available, regardless of the voices that said kits will be a
agentmacgyver
5:59am Mar 20,
2012
Way to end with a whimper. After a fine description of the problems, the solution is "political will" to end corruption.
Don't hold your breath!
Yohanes-Sulaiman
11:10am Mar 20,
2012
@agentmacgyver: Pray tell, what kind of ending you want? I stressed already that there are people actually working on traffic/transportation problems. The Bappenas has already had the transportation improvement plans that never sees the day because there is simply no money to implement it, as the money went to the area which produces the most political payback (and graft).
For instance, I mentioned (and not published by the Editor) that the national budget for this year shows how messed up everything is, with the notoriously corrupt Ministry of Religion get a huge budget increase under justification of "fulfilling the national mandate of spending 20% of budget on education" that shows the government simply does not have a sense of urgency on this matter.
Thus what really needed is the political will and money to get that plan implemented.
@Colroe: good points, didn't think about that. Though, from our experience here, what they will do is to make some "marching patriotic song" with the theme of fuel efficiency, put them on the television and radio for like a few times, then divide the rest of the money to the colleagues/pals/whatever else, and call it a day.
@Serigala: what more laughable is the attempts of some groups like Hizbut Tahrir to expand their influence by publishing "nine points against the planned fuel price increase," which is totally full of BS. For example, they argued that the govt was lying that fuel is costly, since they can get it from free from inside the oil-rich Indonesia. Nothing about exploration, drilling, etc, which costs a lot.
Of course, they still have the la-la land mentality, that we can just spread the seeds, and lo and behold, we can have a country full of productive plants without lifting a finger to take care of them.
@Roland: it is all gong-and-whistle approach as usual. You just need to show that you do something, even cosmetic, then you can say that you tried, then back to the real business of trying to amass as much funds as possible for the next election.
Besides, the implementations of these policies will be a nightmare with a very unprepared police force and bureaucracy to handle them.
JohnnyCool
12:04pm Mar 20,
2012
Fuel price rises are never popular anywhere. Indonesians have the cheapest petrol in the region. Paying more realistic prices for it is inevitable. How the government weans the population off its status-quo mentality on this is a huge political problem. Start - stop - restart - maybe "approaches" underline the unwillingness of governments to tackle the problem head-on.No one ever said it would be easy to appease the masses.
Gutless and ineffectual governments have only themselves to blame for doing too-little too-late and the consequences.
Yohanes-Sulaiman
12:32pm Mar 20,
2012
jusdogin
12:55pm Mar 20,
2012
JohnnyCool
1:08pm Mar 20,
2012
@Yohanes: Thanks, but I already knew that. This is no longer the "early days of Indonesian independence". Why do we "need" it now? Need to re-write the constitution, perhaps?
Why does modern-day secular Indonesia still waste money on a Ministry of Religion? Beats me.
agentmacgyver
6:15pm Mar 20,
2012
JohnnyCool
8:29pm Mar 20,
2012
Sorry - have to go and see if the ferocious Tomcat ants have arrived in Bali.
Yohanes-Sulaiman
10:38am Mar 21,
2012
The goal of my articles is to inform the public, add something to their discourse. So when I said the judicial reform is needed, then I hope my article could be use to help galvanizing the public on what kind of reform is needed and why.
So what do you want me to write? Call for the masses with torch and pitchforks to storm the barricade and depose the government? I think my approach in telling the public that the plan exist, and hoping they would pressure the govt to start thinking about that, serves the society better.
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