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Indonesia fuel prices rocket by 44% sparking protests | Indonesia fuel prices rocket by 44% sparking protests |
(35 minutes later) | |
Indonesia's government has cut a huge fuel subsidy after months of political haggling, causing petrol prices to rise by 44% and diesel by 22%. | Indonesia's government has cut a huge fuel subsidy after months of political haggling, causing petrol prices to rise by 44% and diesel by 22%. |
Thousands of motorists rushed to fill up before midnight, after the measure was announced late on Friday. | |
The announcement sparked clashes in the capital, Jakarta, where protesters blocked roads and fought with police. | The announcement sparked clashes in the capital, Jakarta, where protesters blocked roads and fought with police. |
Indonesians had been demonstrating on the streets of many major cities all week in anticipation of the rise. | Indonesians had been demonstrating on the streets of many major cities all week in anticipation of the rise. |
The measure was agreed by parliament on Monday, but MPs did not say when the new prices would come into effect. | The measure was agreed by parliament on Monday, but MPs did not say when the new prices would come into effect. |
Late on Friday, Energy Minister Jero Wacik announced that there would be new prices from midnight on Friday. | Late on Friday, Energy Minister Jero Wacik announced that there would be new prices from midnight on Friday. |
"The new price for Premium fuel is 6,500 rupiah ($0.66; £0.42) per litre, up from 4,500 rupiah, and Solar diesel will cost 5,500 rupiah per litre, also up from 4,500 rupiah per litre," he said in a statement. | "The new price for Premium fuel is 6,500 rupiah ($0.66; £0.42) per litre, up from 4,500 rupiah, and Solar diesel will cost 5,500 rupiah per litre, also up from 4,500 rupiah per litre," he said in a statement. |
The subsidies are estimated to cost about $20bn a year, equivalent to almost 3% of Indonesia's total economic output. | The subsidies are estimated to cost about $20bn a year, equivalent to almost 3% of Indonesia's total economic output. |
Pressure on economy | Pressure on economy |
President Susilo Bambang Yudhoyono had been trying to reform the subsidies since early last year. | President Susilo Bambang Yudhoyono had been trying to reform the subsidies since early last year. |
But previous attempts were derailed by violent protests. | But previous attempts were derailed by violent protests. |
Indonesia has not implemented a major fuel price rise since 2008, and has some of the lowest prices in the world even after the rise. | Indonesia has not implemented a major fuel price rise since 2008, and has some of the lowest prices in the world even after the rise. |
Analysts say Mr Yudhoyono's failure was threatening the credibility of his government and putting severe pressure on the economy. | Analysts say Mr Yudhoyono's failure was threatening the credibility of his government and putting severe pressure on the economy. |
Economists and international investors have applauded the move, but most Indonesians have been unimpressed. | Economists and international investors have applauded the move, but most Indonesians have been unimpressed. |
Police clashed with students in Surabaya and Yogyakarta during the week, making several arrests. | Police clashed with students in Surabaya and Yogyakarta during the week, making several arrests. |
Muslim groups held protests in Jakarta and Makassar. | Muslim groups held protests in Jakarta and Makassar. |
And local media reported violent clashes in Jakarta late on Friday, with protesters blocking roads and throwing petrol bombs. | And local media reported violent clashes in Jakarta late on Friday, with protesters blocking roads and throwing petrol bombs. |
The police made a number of arrests and several protesters suffered minor injuries. | The police made a number of arrests and several protesters suffered minor injuries. |
The authorities deployed extra police throughout major cities on Saturday, but most protests passed off peacefully. | The authorities deployed extra police throughout major cities on Saturday, but most protests passed off peacefully. |
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