Jun 18 2013
CNN: After protests, Indonesia’s parliament boosts fuel prices by as much as 44%
Jakarta, Indonesia (CNN) — After clashes between police and protesters, Indonesia’s parliament Monday night voted to revise the national budget and allow an increase of up to 44% in the prices of subsidized gas and diesel fuel.
Earlier Monday, protesters who rejected the increase clashed with police outside the parliament building in Jakarta. Police fired tear gas and water cannons at thousands of them before legislators began voting on the budget revisions.
There were smaller protests in other parts of the country. Violence was reported in Malang in East Java province, Ternate in the Maluku Islands and Jambi province.
The vote was delayed for hours as political parties lobbied, behind closed doors, for and against the fuel price increase. As the final vote was announced, university students, who were seated at the parliament’s gallery, locked arms and shouted slogans.
The revised budget will allow gas prices to increase from 4,500 to 6,500 rupiah (46 U.S. cents to 66 U.S. cents) and diesel from 4,500 to 5,000 rupiah. The World Bank has long pushed for a cut in subsidies, which it says benefit mostly rich private car owners, to help ease pressure on the budget. The increased prices will not affect the public transport sector.
Indonesia is an oil-producing country. It became a net oil importer in 2008 and suspended its OPEC membership in 2009. It still enjoys some of the world’s lowest fuel prices.
In 2012, Indonesia spent about $20 billion on fuel subsidies. In previous years, more funds were spent on the hefty subsidies than on education and infrastructure development, the World Bank and the International Institute for Sustainable Development have said.
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