Thousands protest fuel price hike in Indonesia

Police arrest a protestor during clashes at a demonstration against a rise in fuel prices earlier this week.

Story highlights

  • Thousands protested government plan to increase in fuel costs in Indonesia
  • A government plan would increase gas prices by 33% starting April 1
Thousands of protesters marched along Jakarta's main thoroughfare to the presidential palace Wednesday, opposing government plans to increase subsidized fuel prices by 33%.
According to police estimates, between 3,000 and 5,000 protestors participated in the largely peaceful march to reject the price hike, which is expected to take effect April 1.
The fuel price hikes have triggered nationwide protests, mostly organized by student organizations and labor unions, the Jakarta Globe reported. In Makasser, capital of South Sulawesi and the largest city in east Indonesia, students clashed with anti-riot police and set a vehicle alight.
More protests are expected in the days to come.
Shubham Chaudhuri, a World Bank economist in Jakarta, says the government's plans will try to correct an imbalance in government spending. In 2011, the government spent 2.2% of GDP on fuel subsidies "and 1.5% of GDP on infrastructure and 1% of GDP on what we would call social assistance programs," Chaudhri said yesterday.
Indonesia's parliament has yet to approve the proposal but the government says a rise in fuel prices is necessary on April 1. The plan was announced last week and comes after global crude oil prices have steadily risen on growing tensions with Iran, rising more than 7% this year.
Workers also marched in a separate protest Wednesday to the Ministry of Health building to demand better health benefits.