Economy / Indonesia
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Political Pressures May Preclude Further Fuel Price Hikes
July 2008 | Political Risk AlertSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Indonesian President Susilo Bambang Yudhoyono has urged parliament to work with the government to tackle the problem of soaring global oil prices, after the country's lower house on July 1 approved a committee to examine the president's May 24 decision to hike domestic fuel prices by an average 28.7%. Yudhoyono has cautioned that 'with oil prices at US$140 a barrel, [the government] will have to spend IDR205trn (US$22.2bn) on subsidies', and has also warned that IDR90trn (US$9.7bn) would be needed for electricity subsidies, suggesting that further fuel price hikes may well be in the offing. However, political pressures are now threatening to scupper any such plans.