The streets of Indonesia's capital Jakarta were quiet today after the government raised fuel prices for the first time since 2008, compared with earlier this week when protests erupted across the country.
The price of subsidised gasoline was increased by 44 percent to 6,500 rupiah ($0.65) a litre, while diesel is 22 per cent higher at 5,500 rupiah a litre, Energy and Mineral Resources Minister Jero Wacik said June 21 in a press briefing in Jakarta. The changes are effective today.
President Susilo Bambang Yudhoyono's administration raised prices to cut subsidy costs and boost confidence in the rupiah, in a country where riots spurred by soaring living costs helped oust dictator Suharto in 1998. Curbing energy subsidies could reduce demand for oil imports, which have led to trade and current-account deficits and contributed to the rupiah being one of the worst performing currencies in Asia in the past year.
"We need to take steps to boost our economy," Coordinating Minister for the Economy Hatta Rajasa said at the briefing. "In line with the revised state budget, the government is taking the step of adjusting fuel prices, realising that this will affect inflation and people's purchasing power."
Some Jakarta residents were thinking about how to save money in other areas to compensate for higher fuel prices.
Supraman, 32, the owner and deliveryman of a bakery in Hayam Wuruk, western Jakarta, uses a motorbike to deliver bread filled with chocolate, coconut, cheese and minced meat made by his wife that cost 12,000 rupiah each to a few restaurants in the area. He said delivery makes up about 20% of his cost but he doesn't charge a service fee to his customers.
