Thursday, May 15, 2008

Indonesian poor to get 1.5 billion dollars in cash to offset fuel price hike: reports

Indonesia plans to transfer more than 1.5 billion dollars in cash to the poor to offset the cost of a planned hike in fuel prices, reports said Thursday.

The compensation program would see 14.18 trillion rupiah (1.53 billion dollars) transferred to 19.1 million poor families; the Bisnis Indonesia daily quoted Welfare Minister Aburizal Bakrie as saying.

The plan, which would reach 76.4 million people, would be distributed in monthly payments of 100,000 rupiah per household, the Jakarta Post reported.

Indonesia announced its intention to raise fuel prices last week, with rising global oil prices meaning the country is spending increasing amounts on its multibillion dollar subsidy scheme.

The price rise would be no more than 30 percent on average, Bakrie was quoted as saying by the Post.

A 30 percent rise would see the cost of premium gasoline climb to 6,000 rupiah (65 cents) a litre (2.46 dollars a US gallon) from 4,500 rupiah.

The administration of President Susilo Bambang Yudhoyono says the move is essential to cut back the ballooning cost of its subsidy scheme, which outstrips spending on social programs and infrastructure.

But the government is facing mounting opposition from the street as well as parliament, where most parties have reportedly turned against the plan in a bid to win favour with voters ahead of elections next year.

Indonesia last raised its fuel price by 126 percent in 2005, sparking widespread street protests.

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