Jakarta – A new study by the Indonesian Institute of Sciences has examined the way different communities in the country were impacted by the 2005 increase in fuel prices.

LIPI researcher Maxensius Tri Sembodo said Thursday the increase had the biggest impact on low-income communities, with most enduring declines in monthly income and struggling to survive.

Researchers studies the impacts of the Oct. 1, 2005, increase on three sectors. These were fishery, public transportation and micro, small and medium enterprises (MSME).

"Among these sectors, public transportation was the worst hit by the fuel price hike and it has yet to recover," Maxensius told reporters at the LIPI office in Jakarta.

He said public transportation operators had to increase fares to offset rising operating costs, resulting in declining passenger numbers and income.

"To adapt to the situation, owners of public vehicles have reduced the daily fees drivers have to pay," he said.

"Drivers, meanwhile, have to cut their operating hours, mix gasoline with kerosene and go longer between taking their vehicles in for maintenance."

Another LIPI researcher, Purwanto, focused on the impact on the fishery sector. He said most of the some 60 fishermen covered by the study had seen their incomes decline by up to 28 percent from Rp 920,000 (US$99) before the fuel price hike to Rp 660,000.

"Fishermen had to cut budgets, among other things, for ship maintenance, fish cold storage and food during the fishing session to offset the increasing operating costs," he said.

"The situation is aggravated by fishermen's poor bargaining position in the fish market, which leaves them unable to get better prices. They try to adapt by reducing how far out they go to sea and for how long, but this, too, results in reduced incomes."

The fuel price increase affected the MSME sector in different ways and to different degrees, researchers said.

"Larger enterprises in the category were able to adapt better than the smaller ones by increasing prices, reducing the size of products and modifying production tools," LIPI said in the report.

All the MSMEs had to bear increases in operating costs, slides in revenues and declines in production after the fuel price hike.

LIPI conducted the study from April to September with a total of 200 respondents in Semarang and Cilacap in Central Java, and Bengkulu.

The institute suggested the government develop and convert immediately to alternative energies such as natural gas; increase the amount of subsidized fuels for the public transportation sector; and drastically cut the fuel subsidy for private vehicles.

It said these measures were important to prevent further negative impacts of fuel price hikes on low-income communities.

The government is currently planning to limit the sale of subsidized gasoline to private vehicles, and to sell a new type of gasoline to private cars in order to curb the fuel subsidy. (wda)