By Stanley Widianto and Gayatri Suroyo
JAKARTA (Reuters) – Indonesia raised subsidized fuel prices by around 30% on Saturday as the government tries to curb the rise in subsidies despite the risk of mass protests.
The price per liter of subsidized gasoline rose from 7,650 rupees to 10,000 rupees ($0.67), while a liter of subsidized diesel rose from 5,150 rupees to 6,800 rupees, said Energy Minister Arifin Tasrif.
“I really wanted domestic fuel prices to remain affordable through providing subsidies, but the subsidy budget has tripled and will continue to increase,” President Joko Widodo told a news conference.
“Now the government has to make a decision in a difficult situation. This is the government’s last option,” said Jokowi, as the president is known.
Southeast Asia’s largest economy had already increased its energy subsidies in 2022 to 502 trillion rupees ($34 billion), triple the original budget, boosted by rising global oil prices and a devaluation of the rupee.
If prices were not high, the budget would have increased to 698 trillion rupees, said Finance Minister Sri Mulyani Indrawati.
It estimates total energy subsidies range between 591 trillion and 649 trillion rupees for this year after the price rises, assuming the average value of oil will remain in the range of $85 to $100 a barrel for the rest of the year.
(Additional reporting by Fransiska Nangoy, Ananda Teresia and Bernadette Christina)