Indonesia hikes fuel prices despite protests

JAKARTA, May 24, 2008 (AFP) – Indonesia hiked the cost of fuel by around 30 percent Saturday in response to soaring global oil prices and a ballooning subsidy bill, leaving hard-pressed households facing even more economic woe. Long queues formed at petrol stations ahead of the announcement late Friday that prices would rise by an average 28.7 percent from midnight due to record oil costs that have sucked state money out of social programmes.

“Considering the rising global fuel price and the heavy burden of subsidies on the budget, we have decided to raise the fuel price. It is effective at 00:00 May 24,” energy minister Purnomo Yusgiantoro said.

Many ordinary Indonesians say higher fuel prices combined with the recent surge in the cost of food will put an intolerable strain on family budgets.

The price hike sparked protests across the sprawling archipelago of 234 million people when it was flagged earlier this month by President Susilo Bambang Yudhoyono.

The ex-general had promised not to raise fuel costs until after elections next year, but with oil prices smashing records above 130 dollars a barrel this week the government felt it had no choice but slash subsidies.

Indonesian motorists are now paying