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Hundreds Protest in Indonesia Over Fuel Price Hike

Hundreds in Jakarta protest against a possible increase in the country's fuel prices to reduce a government subsidy bill.

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Hundreds in Jakarta protested on Monday (June 17) against fuel hikes.

Indonesia's parliament is looking to pass measures for a 33-percent rise in the country's fuel prices to reduce a government subsidy bill that has cast a shadow over Southeast Asia's biggest economy.

Protesters are worried about the consequences of rising fuel prices.

[Nurdin Muhidin, Protester]:
"If parliament approves the government proposal, our purchasing power would decrease and employers would cut wages, and medium scale industries would disappear. Fuel prices would trigger rising prices especially for basic commodities."

Hundreds gathered in front of the parliament building early on Monday but dispersed after torrential rain hit.

Maintaining the subsidy has undermined the government's reputation in financial markets for fiscal discipline and also contributed to a deepening current account deficit.

Still the rate rises, and a fuel price increase would on the other hand raise the cost of living for Indonesians, a sensitive issue ahead of presidential and general elections next year.

If passed, the measures could also restore some confidence in the struggling rupiah after the central bank scrambled last week to prop up the currency as it was caught in an emerging market sell-off.

A student protester says the government should make more efficient use of its budget instead of cutting subsidies.

[Nazar Nurun, Student]:
"The government has said fuel subsidies are taking billions of rupiah out of the state budget. Actually the budget is not used efficiently because the government failed to optimize its earnings."

Police officials say about 20-thousand security officials have been placed on alert in case of mass protests.

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