Indonesians rally to protest fuel-price hike

Hundreds of people rallied in a third day of demonstrations across Indonesia on Saturday to protest a government decision to more than double fuel prices to keep an economic crisis at bay.

The second increase of the year, which came into effect at midnight on Friday, is part of a government policy to cut fuel subsidies that are devouring one-fifth of Indonesia’s annual Budget.

Hundreds of demonstrators took to the streets in more than 10 cities in the islands of Java, Lombok and Sulawesi on Saturday, staging noisy protests calling for the government to revoke the economically critical decision.

By midday on Saturday, no large demonstrations were reported in the capital, Jakarta, but police said about 13 000 security forces would remain on alert for the next two days.

Three police officers were injured in a brief but intense clash between police and students outside a university campus in central Jakarta on Friday.

“Our alertness remains in place but only God who knows what can happen. Jakarta is still under full alert status and we will maintain law and order,” city police spokesperson Yoga Untung said.

In the tourist town of Yogyakarta in Central Java, about 200 students picketed outside a local state fuel depot and demanded officials there sell kerosene at the old price of 700 rupiah (seven United States cents).

The fuel, widely used by the poor for cooking, went up to 2 000 rupiah (19,4 cents), an increase of 185,7%.

Mines and Energy Minister Purnomo Yusgiantoro, quoted by the Antara news agency, said the government will not raise prices again this year and added that they may come down if global oil values weaken.

“There should not be any more rise until the end of this year,” Purnomo said on Saturday.

Scores of students on the resort island of Lombok near Bali, aided by about 100 bus drivers who went on strike against the new fuel regulation, also urged Jakarta to lower the prices.

Dozens of students in Central Java’s capital of Semarang set fire to effigies of President Susilo Bambang Yudhoyono and Vice-President Yusuf Kalla, despite a police presence.

On Friday, police in the capital fired tear gas to disperse rock-throwing students protesting the fuel-price rise, which was only expected to be in the region of 50%.

Instead, Jakarta raised the cost of domestic fuel by an average of 125%.

The price for premium petrol was raised by 87,5% from 2 400 rupiah to 4 500 rupiah, while diesel oil rose 104% from 2 100 rupiah to 4 300 rupiah.

Yudhoyono on Friday appealed to protesters for calm and said violence would only hinder the country’s already sluggish foreign investment.

Former dictator Suharto was toppled in 1998 after raising fuel prices amid a crippling economic crisis. The first rise this year also brought mass protests.

As global oil prices hover near record highs, Indonesia has been forced to slash the Budget-busting fuel subsidies, which Parliament this week capped at 89,2-trillion rupiah ($8,7-billion) for the year.

Indonesia has had to snap up dollars to buy more expensive fuel, putting the rupiah under pressure, to cope with its old policy of supporting increased subsidies to keep domestic fuel prices artificially low.

Police have deployed thousands of personnel to guard government buildings and fuel sites, but analysts say they do not expect the kind of uprising that helped bring down Suharto.

In March, the government raised prices by an average of 29%.

To cushion the impact on the poor, the government said it would accompany Saturday’s hike with a short-term subsidy of 300 000 rupiah to more than 15-million poor households, as well as incentives for the industry.

Vice-President Kalla and Chief Economic Minister Aburizal Bakrie personally monitored the disbursement of the government’s direct cash subsidies to poor households in west Jakarta.—Sapa-AFP


Client Media Releases

SA political parties talk foreign policy
Barloworld announces new group structure
Should I stay or should I grow?
Use Microsoft's eDiscovery for non-Office 365 data sources