JAKARTA, October 29, 2005 (IslamOnline.net) – The government's recent decision to cut fuel subsidy has pushed the prices of almost everything sky-high, crippling the people's purchasing power days before `Eid Al-Fitr, which marks the end of the holy fasting month of Ramadan.

A week before the Muslim feast, malls, department stores and traditional markets in the capital city don’t seem to be full of shoppers compared with the last Ramadan.

"The number of visitors seems to be reduced drastically compared with the previous Ramadan. May be because of the effect of fuel prices," Novi Yunita, the public relation manager of Pasaraya Mall, told IslamOnline.net on Saturday, October 29.

"It’s unbelievable. I don’t know how to say. Life is harder now. I don’t think I can buy new clothes for my children for this `Eid," Tohir Jumadi, a Jakarta-based taxi driver, told IOL.

"My money is just enough for food."

Jumadi said his customers have been drastically going down since the fuel price hike after his company increased the tariff of the taxi.

Zaki Husein has scarped his shopping plans and just settled with buying two pieces of cloth for his four-year-old-kid due to the mind-boggling prices, adding he is planning to wear the old cloth during `Eid.

"We are just going home then because the prices of everything are very high now," he told IOL.

The prices of essential commodities, including cloths, has increased significantly in the world most populous Muslim country, where half of the 220 million population live on less than $2 a day, according to IOL correspondent.

For instance, the prices of t-shirts at a department store went up by sixty percent in average compared with the costs before the increase of domestic fuel prices.

On October 1, the Indonesian government increased the price of gasoline by 87 percent, diesel fuel by 104 percent while the cost of kerosene poor Indonesians use for cooking went up by a record 185.7 percent.

The hikes were an attempt to cut crippling energy subsidies in the state budget, which is estimated to reach some 89 trillion rupiah (8.9 billion dollars) this year.

Nurfitri Barlian, a housewife, is forcedly considering cutting the variant of cooking menus for the upcoming `Eid because of the high prices of foodstuffs.

"Previously, I spend 30,000 rupiah (30 cents) a day for food but now – after the fuel price increased – I pay out 45,000 rupiah for the same foodstuffs," she told IOL.

"The prices of every single goods seem to continue increasing especially for facing the `Eid day."

Nurfiri noted that one-kilogram white sugar in traditional markets reached to 7,000 rupiah from 5,600 rupiah, one-kilo chicken eggs went up to 10,000 rupiah from 8,000 rupiah, while one litter of cooking oil rose to 8,000 from 6,000 rupiah.

"Spices even increased more than double. I don’t understand what the urgency to cut fuel subsidy is."

Millions of Indonesians return to their hometowns to celebrate the `Eid. (Reuters)

President Susilo Bambang Yudhoyono’s administration had to drastically raise the fuel price following escalating oil price on the world market, said Dr Mohammad Chatib Basri, director of the Institute for Economic and Social Research at the University of Indonesia.

According to Bloomberg News data, the oil price in the world market is currently around $62.3 per barrel.

"With that price (of oil in the world market) the government had to spend 140 trillion rupiah ($14 billion) – which is about 30 percent of our budget – to give subsidy for domestic oil prices," Dr Chatib Basri, who is also an economic advisor for President Bambang Yudhoyono.

He described the government's decision to cut the subsidy as an "inevitable situation".

President Yudhoyono has said the government policy is to revive the country’s macroeconomic by saving 140 trillion rupiah.

He added cutting fuel subsidy also aimed to prevent possible black market trade where cheap petroleum products bought in Indonesia and smuggled out to be sold at higher prices in neighbor countries such as Singapore, East Timor and Malaysia.

It was billed as a way to cushion the blow for Indonesia's poorest of the poor.

But government's efforts to compensate 15.5 million families with cash to offset steep hikes in fuel prices seem to have hit snags.

Even though the government maintains it has done a thorough survey gathering and processing data as well as distributing assistance to the country’s poorest people, the facts are indicating otherwise.

Juju Juariah, a house servant, told IOL that she did not get the voucher provided by the government for those poor people who need to receive the extra money, adding that her neighbors who are economically better than her ironically got it.

"It’s not fair. I am poor enough to get the right. BPS (Central Statistic Agency) officers had made a survey into our family’s condition and seen my house.

"But they made a wrong conclusion in figuring the poor people out. It’s very hard especially for this fasting month," she told IOL.

Juju gets 200,000 rupiah a month from her current job as a house-servant, or 70 cents a day.

Her husband Tieng Saptoni, who works as a rubbish-cleaner has monthly earning of 250,000 rupiah.

The government has set aside 4.65 trillion rupiah for compensation, giving the poorest families in the country 300,000 rupiah each to cover the next three months.

The BPS has been drawing up a demographic map of people living under the poverty line throughout the country since January, and promised that a comprehensive mapping would be complete as soon as the government launched its financial assistant for the poor.

However, local media reported that when the government started distribution of the assistance early this month, a very large number of deserving people were not included.

Their neighborhood unit chiefs had registered their name with the visiting BPS employees, but the government excluded them from the recipient list.

Many poor Indonesians complain the compensation can not fully help them out of their economic hardship because of the domino-effect of the fuel prices hike.

Though in distress, Indonesian Muslims continue to await `Eid Al-Fitr with a new hope.