Indonesia to raise petrol and diesel prices tomorrow
INDONESIA will implement a big increase in fuel prices tomorrow, putting an end to months of agonising over the politically-divisive issue that was damaging confidence in South-east Asia's biggest economy and sapping the state's finances. Fuel subsidies, which the government argues largely benefit the rich, cost around US$20 billion (S$25 billion) last year and have been pushing the former Opec member's current account deeper into deficit as oil imports rise to meet the insatiable demand for cheap fuel.
"The fuel hike will be announced on Friday at midnight and effective after it is announced," Industry Minister M. S. Hidayat told reporters yesterday.
Even after the increases - expected to be 44 per cent for petrol and 22 per cent for diesel - Indonesia will still have some of the cheapest prices in the region.