Jun 27, 2013

Rising Fuel Prices Trigger Inflation, Make Domino Effect of Economy

Statistics Riau Islands province evaluate, rising prices of subsidized fuel would indirectly lead to inflation because the price of other commodities will rise due to high transportation costs.

"Nationally, there will be inflation due to rising prices of subsidized fuel was not too big though," said Head of Distribution Statistics Central Statistics Agency (BPS) Riau Islands (Riau Islands), Mangamputua Gultom, in Tanjungpinang on Thursday.

Gultom said, rising inflation is not so great, but the impact is pretty big domino effect due to the increase of subsidized fuel it. "In Kepri we predict there will be inflation by 0.96 percent due to the increase of subsidized fuel, but the greatest impact is caused domino effect," he said.

Gultom explained a considerable impact in the Riau Islands is the rising prices of basic commodities, such as rice and sugar besides groceries and other necessities. "Riau Islands is not a food-producing areas, all of them brought in from outside the area, so the expensive transportation costs will cause a rise in price of the needs of society," he said.

The impact of rising fuel planned for next April, according to Gultom, will begin to be felt in March. "Due to the economy and society actors will usually do the build-stock material needs, resulting in shortages and price spikes," he said.

Tanjungpinang one resident, Joni, admitted objection fuel prices would be raised, but will still attempt to accept because it is government policy. "Frankly my mind, but still have to accept the consequences because the government wants," said Joni.

Other residents, Ian supports the policy because it considers the increase in the oil's natural ingredients to reduce oil subsidies to be transferred to other fields.

"I think it's only natural that the increase to reduce subsidies, as in other countries also have gone up," said Ian.

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