Indonesia’s black gold

Indonesian President Joko Widodo has bumped up the price of heavily subsidised petrol, because with oil prices below $80 a barrel, something needed to be done about the heavy burden.

Jakarta had planned to spend almost $23bn on fuel subsidies, which is just over 13 percent of its budget, but it needs at least $300bn by the year 2020 to meet its infrastructure needs. 

So fuel prices have increased by 30 percent and petrol will now cost 70 cents a litre. As with any price rise, inflation will also rise, meaning interest rates will rise as well. 

So how will the move affect ordinary Indonesians? What does it mean for much-needed investments? And is the country about to face an energy crisis?

Step Vaessen reports from Jakarta and talks to the country’s energy minister, Sudirman Said.