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May 17, 2008

Planned fuel price hike faces growing opposition

The Indonesian government is facing growing opposition  as it plans to raise fuel prices by a maximum 30 percent to help cut a surging subsidy bill that has badly stretched its 2008 budget.
Hundreds of people coordinated by the National Liberation Forum (FPN) gathered outside the North Sumatra Provincial Legislative Assembly (DPRD) here Friday to express their opposition to the government`s plan to raise fuel oil prices.

The crowd, consisting of students and mass organization members, carried posters and banners that also expressed their rejection of the government`s direct cash assistance (BLT) program for the poor.

A spokesman for the demonstrators, Johan Merdeka, said the government led by President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla had failed to lead the country. Its policies had not sided with the people, the workers, farmers and urban poor in particular.

The arguments the government had cited to justify its plan to raise fuel oil prices by 30 percent made no sense and appeared only to be an attempt to manipulate the people`s awareness, because, in reality, the planned fuel oil price hikes would definitely affect all sectors of the people`s economy, Merdeka said.

Indonesia has some of the lowest fuel prices in Asia and the proposal to increase prices has sparked protests in several parts of the country and raised concerns about the impact on inflation.

Until the last few months the government had been resisting a hike, particularly with parliamentary and presidential elections due next year, but the ongoing march higher of global crude prices has forced authorities to respond.

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