Jakarta lays ground for fuel price hike

AFP-JIJI

Indonesian lawmakers on Monday approved a revised budget to pave the way for the first hike in fuel prices since 2008, amid nationwide protests against the measure.

As masked protesters hurling Molotov cocktails clashed with police outside parliament in Jakarta, legislators voted 338 to 181 in favor of the state budget after more than 10 hours of debate.

The budget contains extra financial assistance to shield the poor from the impact of the expected 33 percent spike in the cost of fuel. President Susilo Bambang Yudhoyono previously said such measures were necessary before he would increase prices.

Indonesia has long been under pressure to reduce fuel subsidies, with economists warning that the payouts gobble up a huge chunk of the state budget and are doing major damage to Southeast Asia’s largest economy.