Indonesian vice President blames parliament for fuel price hikes

Indonesian Vice President Yusuf Kalla on Sunday blamed parliament, which has been most critical of recent fuel price hikes, for forcing the government into raising petroleum prices. Speaking in Medan, North Sumatra, Kalla said parliament only approved a minimal amount of fuel subsidies - 19 trillion rupiah (2.03 billion dollars) - when approving the state budget for 2005, the state Antara news agency reported.
"With that much of subsidies, the government was forced to raise fuel prices because world oil prices had risen to around 56 dollars per barrels while in the 2005 budget law, the oil reference price was only 24 dollars per barrel," Kalla said.
He said high prices and the low subsidy level only left the government with one rational response, raising prices while trying to minimize its impact on the poor through subsidies in health, food, education and the social sectors.
"If the parliament had provided a subsidy of 100 trillion rupiah, then thank you, we would not have raised fuel prices and both our photos would not have been burned," Kalla added.
He was referring to the recent burning of portraits of President Susilo Bambang Yudhoyono and himself by protestors in anti-fuel price hike rallies.
Government ministers have said with oil prices topping 50 dollars a barrel, without the price adjustment it would have to shell out 73 trillion rupiah (7.88 billion dollars) or about 200 billion rupiah (21.60 million dollars) per day for fuel subsidies.
Parliament has split into factions; those supporting fuel price increases to cut subsidies, and those opposing the raise who argue people will not be able to cope with the impact.
Last week, the split erupted into a scuffle in parliament, when legislators opposing the move stormed the podium and almost hit the House Speaker during a plenary to discuss the issue.
The plenary was postponed and will reopen Monday.
The government on February 28 drastically cut budget-draining fuel subsidies, leading to an average 29 percent rise in fuel prices. The move has prompted widespread protests across the country.