Accessibility links

Breaking News

Indonesia Braces for Fuel Price Protests

Indonesia is preparing for mass protests before a fuel price increase scheduled to take effect on Saturday. Lawmakers cleared the way for the controversial move late Tuesday, voting to cut government subsidies to help the government deal with its budget shortfall.

Sporadic protests against a price increase have been launched across Indonesia this week, but so far the numbers have been small. With the year's second fuel-price increase now firmly set, protest organizers are predicting that Thursday's demonstration will be the biggest yet.

A similar price hike in 1998 led to massive demonstrations and rioting, leading to the ouster of President Suharto after more than three decades in power.

Daniel Sparringa, a political analyst at Airlangga University in Surabaya, says most of the protesters will come from various political parties, which see the price increase as a potential weapon against President Susilo Bambang Yudhoyono.

"The political alliances will of course use this momentum as an opportunity to push their political positions," explained Mr.Sparringa. "The opposition of course will see it as an ammunition to attack government policy, and most of the demonstrators will come from that camp, organized either directly or indirectly by the political parties and their alliances."

The government has yet to announce how much it will raise gasoline and diesel prices. In March, prices were raised 29 percent, leading to demonstrations that fizzled out after several days.

Soaring oil prices have forced Indonesia's government to buy dollars to finance fuel purchases, causing the rupiah to depreciate. At the same time, the government has been under popular pressure to keep domestic fuel prices at artificially low levels with the help of subsidies.

The government has prepared a program to help ease the financial burden on the poor, with 16 million households eligible for a lump sum of $30 in compensation during the next three months.

Mr. Daniel says President Yudhoyono has tried to explain the reasons behind the fuel price rise, and he says many ordinary Indonesians will likely accept the added financial burden.

"There is a general understanding that the government does not really have the choice, and it is a bitter decision and they have to live with it ... Among the people on the street, I do not think these people will be the main proponents of the demonstrations ..." he said.

The pending price increase has sparked long lines and fuel shortages this week at gas stations across the country.