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Indonesia to hike fuel prices: minister
uusjio | May 5, 2008 at 06:33 pmby
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Indonesia confirmed Monday it will raise its subsidised fuel prices to protect the state budget from the soaring price of oil.
"We will raise the subsidised fuel price within the limits which people can afford. We're now working on that and we'll announce it to the public later," Coordinating Minister for the Economy Boediono was quoted by AFP as telling reporters.
He did not indicate the size of the price hikes, which are likely to further fuel inflation in Southeast Asia's biggest economy ahead of parliamentary elections next year.
Rising fuel prices helped drive Indonesia's inflation rate to 8.96 percent in April, its fastest rise in more than 18 months.
Indonesia's ballooning fuel subsidies are putting pressure on the budget and draining funds away from spending on the poor and crumbling infrastructure.
The subsidies have become increasingly expensive as the price of oil has surged.
Fuel subsidies this year are projected to nearly triple to 126.8 trillion rupiah (13.8 billion dollars), or about 12 percent of the state budget, based on a revised oil price of 95 dollars per barrel.
In afternoon Asian trade on Monday, New York's main oil futures contract, light sweet crude for June delivery, was 20 cents higher at 116.52 dollars per barrel.
President Susilo Bambang Yudhoyono said ...