Indonesia raised some fuel prices as the government balances the risk of inflationary pressures against a ballooning energy subsidy bill.
The price of Pertalite, the most commonly used gasoline, will increase more than 30% to 10,000 rupiah ($0.67) a liter, while the cost of non-subsidized fuel Pertamax will rise about 20% to 14,500 rupiah, energy minister Arifin Tasrif said on Saturday. The changes are effective as of 2:30pm in Jakarta.
“State funds must be prioritized for people in need,” President Joko Widodo said at the same briefing, adding that more than 70% of fuel subsidies is used by wealthier people who own cars. “At this time, the government must make a decision during a difficult time. This is our last option: to reallocate fuel subsidies.”
