REPUBLIKA.CO.ID, MEDAN - The policy to limit the use of subsidized fuels was expected to raise the prices of goods, the Indonesian Association of Young Businessmen (HIPMI) of North Sumatra chapter said.

"Members of the HIPMI chapter in North Sumatra, including owners of transport and small and medium scale businessmen, have reported an increase in production costs due to restrictions on the sale of subsidized fuels," chief of the Hipmi chapter in North Sumatra, Firsal Ferial Mutyara, said on Saturday.

The policy to restrict the sale of subsidized fuels until 06.00 pm had caused difficulties for small and medium businessmen to obtain subsidized fuels, he noted. The shortage of fuel oils had become increasingly apparent, as indicated by frequent electrical power cuts leading to the rising use of electrical generators, Mutyara added.

"As a result of the rising demand for non-subsidized diesel oil, production costs will increase, forcing producers to raise their selling prices," he said.

He continued that if the government was to lift fuel subsidies, it should do so all at once. By doing so, the prices of goods will increase only once.

"Don't repeat the current experience, in which traders raise the prices of goods after hearing a discourse or policy. When producers raise the prices of goods, they again increase the selling prices," he said then adding that businessmen feared if rising prices would reduce the public's purchasing power.

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