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Indonesia raises fuel prices nearly 30 percent
Die Welt
Indonesia raised fuel prices by nearly 30 percent Saturday to avoid a budget blowout amid the soaring cost of oil on the global market.
Indonesian riot police officers clash with protesters during a demonstration against fuel prices hikes in Surabaya, Indonesia. Indonesia raised fuel prices by nearly 30 percent Saturday to avoid a budget blowout amid the soaring cost of oil on the global market.
Analysts said the government had little choice other than to hike prices on a range of fuel products, but it carries political risks for President Susilo Bambang Yudhoyono ahead of elections early next year.
Ministers have promised to provide direct cash payments to the poor to cushion the blow, but politicians have criticized the move while thousands of students have demonstrated against it in recent days.
Like several other Asian countries, Indonesia has subsidized fuel for decades to keep it affordable for the poor.
… Indonesia’s 2008 budget was drafted using an average oil price of US$85 a barrel for the whole year – a figure later revised to 95 US dollars. When prices topped the 100 US dollar mark, the cost of protecting consumers threatened to destabilize the already beleaguered economy.
… Coordinating Minister for People’s Welfare Aburizal Bakrie said the government would give 10 US dollars (Euro 6.35) per month to the most needy for the next 1.5 years. It will also increase the amount of subsidized rice it allocates to the poor. Indonesia is Southeast Asia’s largest oil producer and a member of OPEC, but it has to import oil because of decades of declining investment in exploration and extraction.
(24 May 2008)
Indonesia to cut fuel subsidies
Reuters via IHT
Indonesia will raise fuel prices from Saturday, the energy minister said Friday, as the government cuts fuel subsidies despite concerns about possible social unrest.
… Fuel prices are set to rise on average by 28.7 percent, with the price of gasoline increasing by a third to 6,000 rupiah, or 65 U.S. cents, a liter.
With presidential and parliamentary elections due next year, the government had initially resisted cutting fuel subsidies, but was forced to act because of the effects on the budget deficit and government borrowing requirement.
(23 May 2008)
Angry protests as Indonesia hikes fuel prices
Agence France-Presse via ABS-CBN
Angry students hurled molotov cocktails at police after Indonesia hiked the cost of gasoline by 33 percent Saturday to rein in subsidies that are exploding along with world oil prices.
More than 100 protesters were arrested as students burned tires and threw homemade fire-bombs outside the National University in Jakarta in response to the midnight price hike, police said.
… “We will fight against this abuse of power by the government. It’s unacceptable,” protest organizer Wardah Hafidz, of the Urban Poor Consortium, told AFP.
“The fuel hike will be followed by rises in the price of basic food, education and transport fares, meaning more people won’t have money to educate or feed their children. This country will collapse.”
(24 May 2008)
Indonesia hands out cash to the poor to soften the blow of 30 percent rise in fuel prices
Associated Press
Indonesia is handing out US$1.5 billion (€900 million) in cash to its poorest residents to soften the blow of big fuel price rises – a move that might bring the government short-term relief after weeks of protests, analysts said Sunday.
The government moved quickly in making initial payments of around US$30 (€19) to tens of thousands of people, hoping to stave off any social unrest triggered by its decision Saturday to raise the prices of a range of fuel products by nearly 30 percent.
(25 May 2008)
