What are the Impacts if Pertalite, Solar, Elpiji, and Electricity Rise? This is what the economist says. Page all

KOMPAS.com – The government plans to increase tariffs electricityprice LPG 3 kg, Pertalite and Solar.

This statement was conveyed by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif at a Working Meeting with Commission VII DPR RI, Wednesday (13/4/2022).

Quoted from kompas.com (13/4/2022), the planned increase in some of these commodities is the government’s strategy to deal with rising world oil prices.

Later, the government will take short-term and long-term steps to reduce APBD pressure and maintain inflation economy.

In addition, on this occasion Arifin revealed that the government will maintain the availability of supply and distribution BBM especially in the period of Ramadan and Eid.

So, what will be the impact if the government raises electricity rates, the price of 3 kg LPG, Pertalite and Solar?

Read also: There are a lot of questions about Pertalite and Solar Prices are said to be going up, this is what Pertamina says

The occurrence of inflation

Gadjah Mada University economist Eddy Junarsin said: increase in electricity ratesthe price of 3 kg LPG, Pertalite and Solar will lead to inflation.

This is different from the increase in the Pertamax type of fuel which was previously carried out by the Indonesian government.

“Yesterday, raising Pertamax did not affect inflation, because Pertamax is used by vehicle owners who are relatively capable of paying,” he said when contacted by Kompas.com, Thursday (14/4/2022).

However, if electricity rates, the price of 3 kg LPG, Pertalite and Solar are increased, it is certain that the price of goods in general will also increase.

Because the increase in commodity prices directly affects all levels of society.

For example, for the consumption of Pertalite type of fuel, people consume about 75 percent of the total national fuel consumption.

“Inflation That’s a general price increase. Because if the fuel needed, such as business vehicles, trucks, and transporters of all kinds of goods, automatically increases the price of goods. Electricity Also, electricity is needed by companies, industries and households as well,” said Eddy.

Later, if inflation increases, the effect will spread to various aspects.

Read also: There are many questions about Empty Pertalite at a number of gas stations after Pertamax prices increase, this is what Pertamina says

Inflation rate

According to data for March 2022, the inflation rate in Indonesia is at 2.6 percent year on year (March 2022 compared to March 2021). This figure is still ideal.

“Because healthy inflation is around 0 to 3 percent a year, it’s a relatively healthy number,” explained Eddy.

However, if it happened increase in electricity rates, the price of 3 kg LPG, Pertalite and Solar needed by households and industry, it is estimated that the inflation rate will increase to 4 percent or more.

Especially before Idul Fitri, which usually naturally increases the price of goods.

“Maybe in April it can penetrate 3 or 3.5 or even 4 (percent) year on yearIt’s possible, so direct inflation,” said Eddy.

Read also: Details of the Prices of Basic Needs Ahead of Ramadan, What’s Rising?

Impact of rising inflation

In addition to rising prices for goods, if inflation increases, it will spread to other fields, such as the weakening of the rupiah and hampered economic growth.

“Inflation rises are usually accompanied by a weakening of the rupiah currency then economic growth will be a bit,” he said stuck or later,” he said.

It is feared that this increase will trigger social unrest in the community.

The government must also pay attention to the social turmoil, because the commodities that experienced an increase were related to the daily needs of the people.

If the government does not pay attention, then the people will protest with demonstrations.

It is feared that the demonstrations carried out will be destructive so that it is not good for Indonesia’s productivity.

“What is feared is that it will be destructive, if it’s just protests, it’s okay if you make a fuss that’s not productive for the country,” he explained.

Read also: 4 Facts about BEM SI Demo: Targeting Thousands of People, Changing Locations, 4 Demands, and Government Messages

Government dilemma

On the one hand, an increase in the price of some commodities will make the price of goods rise, on the other hand the government is also in a dilemma, because if it does not increase prices, the APBN budget used for subsidies will also swell.

The increase in world oil prices has a very large effect on Indonesia, because Indonesia’s oil imports are high.

“So we know that we import fuel that is very powerful. It’s probably 700,000 barrels of imports every day,” said Eddy.

The government is expected to reduce dependence on oil by utilizing sustainable electricity technology.

In addition, with problems like this, Eddy also revealed that the government should also improve public transportation facilities so that national fuel consumption becomes more efficient.

“So the solution is to improve technology, the national transportation system, the electricity system too, right now, there’s a lot of advanced technology, right? sustainablereduce dependence on oil, ideally like that,” he concluded.

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