According to a report from Agence France-Presse, President Susilo Bambang Yudhoyono has issued assurances that electricity and fuel prices will remain unchanged in 2007 in order to help keep a lid on the national inflation rate.
The President was quoted by Agence France-Press as saying: "We do not want to take risks on inflation. We also are taking into consideration the (issue of) people's purchasing power."
The President, however, did not discount that the Government may be compelled to continue to substantially subsidize the State Power Board (PLN) and PT Pertamina, if domestic power prices fall below market values.
The Government increase fuel prices an average 126% in October of 2005, which sparked round of inflation that averaged 17.11% in that year.
Budgeted subsidies for fuel in 2007 are set at Rp. 68.6 trillion (approximately US$756 million) and Rp. 25.8 trillion (approximately US$284 million) for electrical subsidies.
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