Indonesia fuel hike plan met with protests
JAKARTA, Indonesia -- Indonesia said today that it will more than double the average cost of fuel to try to stave off an economic crisis, despite protests by thousands of people, some of whom burned tires and threw rocks at police.
Security forces responded to demonstrations by firing tear gas at more than 100 rioting students, then chasing them down and hitting some of them with sticks.
President Susilo Bambang Yudhoyono said the cash-strapped government of this major oil producer, which for years has subsidized fuel to let motorists fill up for less than 95 cents per gallon, could not afford to keep doing so amid spiraling global energy prices.
The government said after a three-hour Cabinet meeting that -- as of today -- the cost of gasoline will go up 87 percent -- to $1.71 per gallon. It said the price of diesel fuel will more than double and the cost of kerosene will nearly triple.
That will push up the price of everything from rice to fish to cigarettes in the sprawling country of 220 million people, half of whom live on less than $2 a day.
''I realize that this is not a popular policy . . . but we have to do it to save the nation's budget and the future of the country," Yudhoyono said as university students set tires ablaze, vandalized a bus, and exchanged a volley of rocks with police on a busy street in the capital.
He called on everyone to remain calm, saying ''anarchy will only deter investment."
Despite the brief flare-up in Jakarta, most rallies were peaceful, scattered, and relatively small -- given the size of the country and its history of massive street rallies.
But more demonstrations were expected, and the government deployed thousands of soldiers and police at major intersections, the presidential palace and other strategic locations.
Indonesia is Southeast Asia's only member of OPEC, but it has to import oil because of decades of declining investment in exploration and extraction due to corruption and a weak legal system that makes people wary of doing business.
