Under the draft, each of the 15 million low-income households in the country will receive 150,000 rupiah (15 USD) per month for a period of four months. After that, the government will increase fuel prices by 33 percent.
The price of petrol is expected to rise from 4,500 rupiah (0.46 USD) to 6,500 rupiah (0.66 USD) per litre and diesel fuel, from 4,500 rupiah (0.46 USD) to 5,500 rupiah (0.56 USD) per litre.
Indonesian Minister of Finance Chatib Basri said his country has to cut the fuel price subsidy in order to reduce budget deficit, which is threatening the Southeast Asian leading economy.
The plan is considered as the first move President Susilo Bambang Yudhoyono has committed to reforming Indonesia’s economy.
This, however, sparked protests in various localities in Indonesia. In Jakarta alone, about 3,000 people took to the streets, rallying in front of the parliament building to oppose the plan.-VNA