10/01/2005, 00.00
INDONESIA
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The price of fuel doubles as protests continue

The price hike has affected kerosene most of all, which is frequently used by the poorest of the poor. President Susilo counters: it must be done to "save the future of the country". Thousands of soldiers have mobilised to prevent large manifestations.

Jakarta (AsiaNews/Agencies) – The Indonesian government has more than doubled the price of fuel notwithstanding several protests in city squares which have rocked the country in the past two days.

The new prices, announced shortly after midnight yesterday by Aburizal Barie, coordinator for the Economy Ministry, register an average 126.6% increase, with kerosene increasing to 2,000 rupees (around 20 cents of a US dollar) from 700 rupees per litre. The increase is higher than expected and it affects mostly poor families who use kerosene for cooking. More than half of Indonesia's 220 million inhabitants live off less than two dollars per day.

Vice President Jusuf Kalla defended the government's decision to increase fuel prices a few days ahead of Ramadhan, saying people "would consume less kerosene in the month as they only cook twice a day".

Hours before the increases were announced, protests and manifestations unfolded in the squares of many cities across the country. Thousands of soldiers and police were lined up to block off public offices and streets. In Jakarta, at least 100 students of the Christian University clashed with police, who threw tear gas and chased protesters, beating some with batons. In Makassar, hundreds of students blocked the streets around the campus of the Hasanuddin University.

The fuel price hike is the outcome of a decision taken by President Susilo Bambang Yudhoyono to slash government fuel subsidies to stop them from draining the annual budget. The measure has the backing of the House of Representatives. In Indonesia, inadequate utilization of petrol resources – owing to corruption and a lack of investment in research and extraction – combined with jumped-up oil prices on the international market, have pushed the cost of public subsidies up to 100 trillion rupees (more than 10 billion US dollars); this means that fuel subsidies were absorbing a quarter of public expenditure.

"It is not an easy choice. I understand that this is a bitter pill but I have to do it to save the country's economy and the country's future," President Susilo Bambang Yudhoyono said yesterday, He promised subsidies and other direct benefits for the poor. Fuel had already increased by 29% in March.

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