Mandiri Sekuritas Government to limit subsidized fuel starting October 2010 the soonest

􀂄 According to Kontan daily, the government, which pointed out by the Finance minister, Agus Martowardojo yesterday, would start to limit the usage of subsidized fuel in Oct10 the soonest, as at the fuel consumption is expected to exceed the 2010 quota by 2.1mn kl to 38.6mn kl. The government would prohibit private vehicle that been produced in a certain year to consume the subsidized fuel.

􀂄 Should this policy is implemented this year, we believe, it would give an upward pressure to this year inflation. We currently expect the fuel consumption rationing would occur early next year, which bring us to expect inflation to accelerate to 6.6% yoy in 2011 from this year around 6.3% yoy.