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Fuel price hike weakens people's purchasing power, hits textile industry

Tempo - September 5, 2022

Bisnis.Com, Jakarta – A number of textile entrepreneurs expressed deep worries about the government's decision to increase the subsidized fuel price, Pertalite and Solar, by more than 30 percent as it would drop people's purchasing power.

The Indonesian Fiber and Filament Yarn Producers Association (APSyFI) chairman Redma Wirawasta said the price increase would greatly affect the company's logistics because it relies on Solar and Pertalite. This would surely raise the price of goods.

"It's not the sole problem. What we are more worried about is the people's purchasing power, because the logistics price is all going up, all prices are going up too, especially food prices," said Redma on Sunday, September 4, 2022.

As a primary need, people will focus more on spending their money on food than on other things, such as products made from fiber and yarn. "In the end, there will be a decline in textile consumption," he added.

Redma said that even before the fuel price hike, the textile industry had seen a decline in August 2022 due to the market being dominated by imported goods. In fact, he added, several entrepreneurs have stopped production because of piling stocks.

"If we have one month's stock, we don't have cash flow reserves to buy raw materials. In the upstream, when it can't be sold, we stop production," Redma explained.

Secretary General of the Indonesian Textile Association (API) Rizal Tanzil Rahman shared a similar statement. He was worried about the decline in people's purchasing power and hoped that the fuel price, particularly Solar, could return to the previous rate.

Source: https://en.tempo.co/read/1630472/fuel-price-hike-weakens-peoples-purchasing-power-hits-textile-industr