Indonesia fuel prices rocket by 44% sparking protests
- 22 June 2013
- From the section Asia
Indonesia's government has cut a huge fuel subsidy after months of political haggling, causing petrol prices to rise by 44% and diesel by 22%.
Thousands of motorists rushed to fill up before midnight, after the measure was announced late on Friday.
The announcement sparked clashes in the capital, Jakarta, where protesters blocked roads and fought with police.
Indonesians had been demonstrating on the streets of many major cities all week in anticipation of the rise.
The measure was agreed by parliament on Monday, but MPs did not say when the new prices would come into effect.
Late on Friday, Energy Minister Jero Wacik announced that there would be new prices from midnight on Friday.
"The new price for Premium fuel is 6,500 rupiah ($0.66; £0.42) per litre, up from 4,500 rupiah, and Solar diesel will cost 5,500 rupiah per litre, also up from 4,500 rupiah per litre," he said in a statement.
The subsidies are estimated to cost about $20bn a year, equivalent to almost 3% of Indonesia's total economic output.
Pressure on economy
President Susilo Bambang Yudhoyono had been trying to reform the subsidies since early last year.
But previous attempts were derailed by violent protests.
Indonesia has not implemented a major fuel price rise since 2008, and has some of the lowest prices in the world even after the rise.
Analysts say Mr Yudhoyono's failure was threatening the credibility of his government and putting severe pressure on the economy.
Economists and international investors have applauded the move, but most Indonesians have been unimpressed.
Police clashed with students in Surabaya and Yogyakarta during the week, making several arrests.
Muslim groups held protests in Jakarta and Makassar.
And local media reported violent clashes in Jakarta late on Friday, with protesters blocking roads and throwing petrol bombs.
The police made a number of arrests and several protesters suffered minor injuries.
The authorities deployed extra police throughout major cities on Saturday, but most protests passed off peacefully.