Bloomberg News

Indonesia’s Opposition Party Rallies Against Fuel Price Increase

June 19, 2013

About 600 members of Indonesia’s biggest opposition party protested in Jakarta today against a government plan to raise subsidized fuel prices.

Supporters and officials of the Indonesian Democratic Party of Struggle, or PDI-P, gathered in Central Jakarta and urged the public to reject the proposed fuel policy. PDI-P, led by former President Megawati Soekarnoputri, lost a parliament vote on June 17 to block approval of the revised 2013 state budget, which paves the way to raise prices of subsidized fuel.

“We know we lost,” Ribka Tjiptaning, chairwoman of a parliamentary commission for labor and health affairs, who helped organize today’s protest, said during the demonstration. “But as a PDI-P faction member I believe the struggle doesn’t end there.”

Curbing energy subsidies, which cost the government 211.9 trillion rupiah ($21 billion) last year, will help narrow the country’s trade and current-account deficits. Increasing fuel prices would improve investor confidence in the economy after the shortfalls made the rupiah Asia’s worst performing currency after the Japanese yen over the past year.

The rupiah was little changed at 9,906 per U.S. dollar as of 2:31 p.m. local time. It has slipped 2.8 percent this year.

The government plans to increase fuel prices this week, Planning Minister Armida Alisjahbana said on June 17, when parliament members voted 338 to 181 in favor of the 2013 revised 2013 state budget. Protests erupted across the nation during and after the vote.

Living Costs

Part of the budget is a fuel compensation program which President Susilo Bambang Yudhoyono made a precondition for raising fuel prices. The government expects the increase will boost inflation to over 7 percent.

Yudhoyono has put off raising fuel prices since protests derailed a planned increase last year, in a country where riots spurred by soaring living costs helped oust dictator Suharto in 1998. About 14,770 police officers have been prepared for the protests, including to guard the parliament complex and presidential office, Rikwanto, a police spokesman in Jakarta, said in a mobile-phone text message earlier today.

PDI-P is supported by Jakarta Governor Joko Widodo, who leads popularity polls for the presidential election next year. Megawati will decide if he runs, Widodo said on June 13.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net


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