Big fuel price rise in Indonesia

There are fears the protests could spill into violence

Indonesia's government has announced fuel price increases averaging 22%, despite protests in several cities.

Energy Minister Purnomo Yusgiantoro said subsidies were being cut to reduce the burden on the national budget.

New prices (rupiah/litre)

Kerosene: 600

Petrol: 1,550

Auto diesel: 1,150

Industrial diesel: 1,110

The cost of most fuel products would now be pegged to world market price, with state energy firm Pertamina publishing a revised price list at the beginning of every month, Mr Yusgiantoro said.

The news prompted student protests in south Jakarta and Makassar, reports said.

A sharp rise in fuel prices at the height of the financial crisis in May 1998 triggered rioting which contributed to the fall of the then-president Suharto.

Domestic impact

The price of most domestic fuels is rising by more than the average.

The kerosene price has risen by 50% to 600 rupiah (£0.04; $0.06) per litre, with automotive diesel prices increasing 28% to 1,150 rupiah per litre.

But premium petrol has increased by less than 7% to 1,550 rupiah per litre.

The government said the new prices, except for household kerosene, would apply until the end of February when monthly reviews would see prices move in line with those in neighbouring Singapore.

Jakarta has seen queues for fuel since the New Year in expectation of the price rise - widely expected after parliament last October approved an average 30% increase for 2002.

The government says it needs to reduce oil subsidies to ease budget pressures.

Indonesia was given a $3bn lifeline by international lenders last November, days after the World Bank warned the government it had just six months to prove it is serious about reform.

The government has said the oil subsidy will drop from 53,800bn rupiah (£3.61bn; $5.2bn) to $30,400bn rupiah in 2002.