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JAKARTA. In what could be seen as a desperate attempt to restore his party’s falling electability, President Susilo Bambang Yudhoyono has intensified his populist rhetoric by retracting and denouncing a policy approved by his own administration.
On Sunday, the President chided state-run oil and gas firm Pertamina for increasing the price of 12-kilogram liquefied petroleum gas (LPG) canisters by more than 60 percent, a policy that Yudhoyono said would “only burden the people”.
“[The policy] was not well coordinated and ill-prepared. This should not have happened,” he said after a Cabinet meeting on Sunday. He admitted that Pertamina had the mandate to raise LPG prices without notifying him, but since the policy had affected many people, the government should intervene. “I’ve given Pertamina 24 hours to review its decision,” he said.
Shortly after he landed in Jakarta on Sunday after overseeing the implementation of the national health insurance (JKN) program in Surabaya, East Java, the President summoned Pertamina president director Karen Agustiawan to a limited Cabinet meeting at Halim Perdanakusuma Airport.
Earlier, Edhie Baskoro Yudhoyono, the President’s son and secretary-general of his Democratic Party, said that the party opposed the LPG price hike and urged the government to have it reviewed. “This was a corporate action and we are convinced that it was not reported to the President,” he said.
Yudhoyono’s move baffled politicians from rival parties and pundits, who questioned why the government, as the owner of Pertamina, was not aware of the firm’s decision to raise the 12-kg LPG canister price from Rp 70,200 (US$5.70) to Rp 117,708 starting this year.
According to Pertamina corporate communications vice president Ali Mundakir, the government had been informed about the policy and that “everything had been done according to procedure”.
The company argued it had to raise the price as it was suffering annual losses of around Rp 6 trillion on 12-kg LPG canisters.
The Supreme Audit Agency (BPK) had warned Pertamina that it had to prevent future losses in its LPG business or face prosecution.
Following the Cabinet meeting, State-owned Enterprises Minister Dahlan Iskan claimed responsibility for the mishap, saying that he approved Pertamina’s decision to raise the LPG price but failed to inform the President. Dahlan previously denied any involvement in the decision.
Critics said the LPG controversy was nothing but a stunt to polish the image of Yudhoyono and his ailing Democratic Party. “The price hike was not a sudden move, but rather planned and known by the government,” Bambang Soesatyo of the Golkar Party said. “If Yudhoyono had not approved it, Pertamina would not have dared do it.”
Indonesian Democratic Party of Struggle (PDI-P) politician Hasto Kristianto concurred with Bambang, arguing that the government’s attempt to cancel the LPG price hike appeared to be scripted along the lines of Yudhoyono’s decision to cut fuel prices ahead of the 2009 general elections.
Another Golkar politician, Ade Komarudin, said that Yudhoyono could have responded quickly to the sudden LPG price hike without making a public fuss. “It’s very simple. If the President feels that Pertamina’s policy is wrong, he can just make a call and ask the state-owned company to cancel it,” Ade said.
This is the second time the government has been forced to make a U-turn after issuing a policy that drew public outcry. Late last month, Yudhoyono decided to revoke two presidential regulations only days after signing them following criticism the regulations were unfair as they allowed government officials to seek medical treatment abroad at the taxpayer’s expense.
The President’s party has seen its popularity plummet over the past years due to various graft cases implicating its top members. The party has also been struggling to find a figurehead to replace Yudhoyono, who will complete his second term and is not allowed to seek reelection.
Political observer Burhanuddin Muhtadi said Yudhoyono’s latest populist pitch would not help much in boosting the Democratic Party’s electability in the general elections. “The debate over the LPG price hike just looks too messy for the public. It only shows lack of coordination between the President and his aides,” he said.
University of Indonesia political science lecturer Cecep Hidayat called the ruling party’s way of managing the LPG price issue “clever but rude”. “We have to admit that irrational voters will be very grateful to the government for canceling the LPG price hike,” he said. (Ina Parlina and Hasyim Widhiarto)
