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Indonesia Hikes Fuel Prices 30%
Indonesia has reduced government subsidies on fuel in an effort to save the country's economy more than $8 billion in 2015.
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Indonesia has reduced government subsidies on fuel in an effort to save the country's economy more than $8 billion in 2015.
The result has been a 30% hike in retail fuel prices, which have sparked protests and long queues at service stations, BBC News reports.
Still, fuel prices in Indonesia which spends some $23 billion on fuel subsidies remain among the lowest in the world. Even after the current price hike of 16 cents per liter (61 cents per gallon), the average price of gasoline and diesel fuel is about $2.65 and $2.33 per gallon, respectively, according to the report.
Joko Widodo, who became Indonesia's president in October, says the subsidy cut will help the country reduce its trade deficit and fund infrastructure, healthcare and education projects.
The government also cautions that higher fuel prices also are likely to boost inflation to 7.3% through February. BBC News notes that inflation in Indonesia jumped to almost 10% last year when fuel prices were raised.
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