Indonesia has no plans to raise subsidised fuel prices again this year despite soaring global crude oil prices, the energy minister said on Monday. Indonesia increased fuel prices in May due to ballooning subsidies on the back of soaring global oil prices, sparking protests in the country where millions are already suffering from rising food prices.
Despite the fuel price hike, Southeast Asia's biggest economy still has some of the lowest fuel prices in the region. US crude oil rose $1.98 to hit $142.19 a barrel on Monday, nearing a record of $142.99 a barrel on Friday. "There is no plan so far to increase fuel prices although they're still below market prices," Purnomo Yusgiantoro told reporters.
"It is not easy to cut subsidies. Now the economy follows politics, not the other way around." Price increases have always been a sensitive issue in Indonesia. A fuel price increase was one of the reasons for massive protests that led to the downfall of former President Suharto in 1998.
A recent poll showed President Susilo Bambang Yudhoyono's popularity ratings have fallen because of the recent fuel price increase and he would likely lose if an election were held today. Indonesia, Asia-Pacific's only Opec member, has turned into a net importer of crude oil in recent years after production slumped as the country failed to tap new fields fast enough.
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