Friday night (23/05) the government finally declare the increasing of fuel price (premium, gasoline and kerosene), despite of the objection by the public. Government announce it through several related ministries namely, Ministry of Finance, Ministry of Energy and Mineral Resources, Ministry of Trade, Coordinating Ministry of Social Welfare, Ministry of Social Affair and several other people like Presidential spoke person, Director of Pertamina (National Oil Company) and some experts from the Department of Economics. Officially the average increase in fuel is 28,7%.

Based on the current policy, Serikat Petani Indonesia (SPI) firmly denies the increasing of fuel price and demands the government to withdraw the policy. SPI noted that SBY-JK regime has increased the fuel price three times, with the total cumulative of increase almost 200%. Meanwhile the Direct Cash Subsidy (BLT) of Rp 100.000 is only temporary to slowing down the people’s burden.

Government with its alibi in mass media (24/05) said that the result of international fuel price rise is unavoidable to increase national price, also that fuel price in Indonesia is still consider low. In fact our fuel price is not too low, if we compare with Malaysia which sells its fuel with Rp 5.310 per liter. And the average income per person in Malaysia is four times the income in our country.

Impact for Peasants
On the other hand, the government is only increase Government Purchasing Price (HPP) of rice at farm level for 9%, it means that there is no balance between the production cost with the income received. For peasant, fuel price increase means the increase in the production cost.

According to SPI for small peasant or farm labor the production cost is not only for seed and fertilizer but also including land rent, tractors rent and water pump as well as harvest processing like rice milling and transportation. For example a hand tractor with the power of 8.5 HP need 18 liter of gasoline per hectare to tile the land until it ready for cultivate that will take ± 18 hours. All the increase will be the subject to the farmers like the previous fuel price increase in 2005.

Currently the land rent price in Cirebon, West Java increasing 100 % from Rp 5 million per hectare per year to Rp 10 million per hectare per year, the price for renting tractor is also increase to Rp 500.000. With this increasing production cost, the farmer wouldn’t receive profit from their production.

Dictated by World Bank
SPI is assessing that the increasing fuel price is a result from direct assistance from World Bank. It is revealed from Indonesian debt document to World Bank for the Program of Energy and Mining Development, Loan No. 4712-IND from 2003 to December 2008. This debt program worth 141 million US$ aim to eliminate fuel subsidy for the people.

Related with National Income and Expenditure Budget (APBN), like it seen in Medium Term Development Plan (RJPM) 2004-2009, the government is intended to reduce the volume of subsidy from 6,7% of Gross Domestic Product (PDB) in 2004 to 0,3 percent of Gross Domestic Product in 2009. It means the elimination of fuel subsidy is already well plan.

For that reason also that through the issued of Law No. 22/2001 on Oil and Natural Gas, the government tries to legally release the fuel price into market mechanism. Hence, the policy to increase fuel subsidy is not merely to respond global economic situation. It is very much related with the neoliberal mechanism implemented by the “Berkeley Mafia” where all the aspects of livelihood are being liberalized, privatized and deregulate towards market mechanism for the benefit of huge investors. The same thing happens in electricity, water and agriculture policies. In oil and gases specifically, the increasing of price in October 2005 followed by numerous gas station owned by TNCs like Shell and Petronas in Indonesia.

SPI Demand
To cope with the current Food and Energy Crisis, Serikat Petani Indonesia (SPI) demand based on the constitution:

1. Immediately implement agrarian reform program like promised by the President since early 2007. Therefore 13 million poor farm household are able to work and guarantee the livelihood of their family. Agrarian reform means that there is a structural restructuring over the ownership, control and utilization of natural resources including mining sector for national importance.
2. End the expansion of non food plantation by the companies with export orientation; on the contrary government must enabling family based food farming system with the orientation of fulfilling local and national need. Hence, giving incentive for food farmer especially those conducting sustainable agriculture, and stopping subsidy for unsustainable agriculture business (corporate farming and monoculture).
3. Building communal food storage immediately.
4. Energy retrenchment policies with high tax for high energy user society.
5. Re-strength the capacity of rural people as energy producer that due to neoliberal system has become energy consumer.
6. Maximally using people friendly, cheap and mass technology like water, wind, solar, biogas and wave energy.
7. Cancel debt and Repayment of odious debt.

Source: http://www.spi.or.id/en/?p=34