Indonesian parliament delays fuel price rise

Legislators vote to cut subsidies in August but only if price of crude rises above $120 a barrel, after mass protests.

Indonesia’s parliament has voted to block the government’s plan to raise fuel prices by more than 30 per cent by delaying the increases until August 2012.

The government was expected to raise the price of gasoline from around 50 cents to 65 cents per litre on Sunday, saying they had no choice but to cut budget-busting fuel subsidies.

But the 550-seat house voted on Saturday to allow a price rise only if the average price of Indonesian crude in six months increases 15 per cent above $105 a barrel, to $120.75 per barrel. The average price of Indonesian crude is now $116.49 per barrel.

The state subsidies has granted motorists to fill up for roughly $2 per gallon for a few years.

With some legislators calling for subsidies to be continued indefinitely, members of the opposition Indonesian Democratic Party of Struggle walked out in protest as the vote was under way.

But the delayed price rise was approved by 356 legislators, with 82 voting against it.

The vote came after street protests on Friday in major cities, with more than 81,000 people staging rallies across the country.

More than 2,000 policemen and hundreds of soldiers were stationed to guard the parliament complex, with police firing tear gas and water cannons to disperse thousands of students and workers who had blocked access to a main toll road and torn down fences near the main gate of the complex.

With global oil prices surging, the government argues that it has little choice but to raise fuel prices.

But that hasn’t stopped thousands in a nation of 240 million, many of whom live in poverty, from taking to the streets every day for the last several weeks.

Source: Al Jazeera