Thousands rally against fuel price hikes in Indonesia

May 12th, 2008 - 5:20 pm ICT by admin  

Jakarta, May 12 (DPA) Anti-government rallies were held in several of Indonesia’s big cities Monday, to protest against a government plan to raise fuel prices and cut subsidies. At the capital’s main roundabout, several thousand students, activists and housewives began a march to the presidential palace, causing heavy traffic jams along Jakarta’s main thoroughfares.

“This (fuel prices hike) will only add to the misery of destitute people. The fuel price hike will cause the prices of other basic needs to increase,” shouted Edi Saidi, the protest coordinator from the Urban Poor Consortium.

“We call on the government to cancel its plans to raise the fuel prices,” Saidi said.

Triggered by rising global oil prices, President Susilo Bambang Yudhoyono signalled early this month that the government will raise fuel prices as high as 30 percent in order to safeguard the state budget.

Yudhoyono - facing elections next year - would also spend around $1.5 billion this year to compensate 19.1 million poor families for lost income after it raises fuel prices, expected later this month.

Indonesia will hold parliamentary and presidential elections next year.

Price hikes are a sensitive subject in Indonesia, the world’s fourth most-populous nation. In the past, subsidy cuts have led to social unrest and a big fuel price increase was the spark that triggered rioting that helped topple the late president Suharto in 1998.

Economists say inflation in Indonesia will soar once the government goes ahead with plans to put up the prices of subsidised fuels. The last time Indonesia raised the price of subsidised fuels was in October 2005.

Many Indonesians live on less than $2 a day and are already suffering from the impact of high food prices.

Waving posters and banners, hundreds of protesters marched to the presidential palace. They carried signs reading: “Reject Fuel Oil Price Hikes” and “Lower Prices of Essential Supplies”. The protesters also criticised Yudhoyono’s government performance, saying many more people have become poor under his regime.

In East Java, security was extra tight as President Yudhoyono visited the provincial capital of Surabaya. Dozens of students tried to block his way to a university campus but to no avail.

One protester was brought into police custody after a brief scuffle between students and police.

In the West Java capital of Bandung, dozens of protesters trampled and torched a picture of Yudhoyono and Vice President Jusuf Kalla to express their anger against the government’s plans to raise the fuel prices, reported online news portal.

More anti-government rallies took place in several other cities, including in Medan of North Sumatra, Pekanbaru in eastern Sumatra, Yogyakarta in central Java and Makassar in South Sulawesi.

Yudhoyono, who rose to power in 2004 as the country’s first direct elected president, has little choice but to wean impoverished Indonesians off Asia’s cheapest petrol and heavily subsidised kerosene used for cooking.

Sky-rocketing oil prices have ratcheted up fuel subsidies, which this year are expected to top $20 billion, or one-fifth of total government spending.

Government ministers have said that the planned fuel price increase will save the government 35 trillion rupiah ($3.8 billion) this year.

Indonesia is the only Asia-Pacific member of the Organisation of Petroleum Exporting Countries (OPEC), but has turned into a net importer of crude in recent years due to sharply declining output.

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