Indonesia expected to approve fuel hike

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Associated Press

Posted on June 17, 2013 at 4:02 AM

JAKARTA, Indonesia (AP) — Indonesia's parliament is expected to approve a budget that will slash government fuel subsidies, a move that will save the government billions of dollars but has already sparked angry protests opposing increased gasoline prices.

The House was expected to pass the measure Monday. It includes around $900 million for cash handouts to compensate the poor for the 33 percent average increase at the pumps.

Street protests erupted in major cities and clashes with police were reported. More than 18,000 police and soldiers were deployed to secure the capital, Jakarta.

In 2011, the subsidy cost close to $20 billion, the same amount the government aims to spend on infrastructure in 2013. The issue is highly sensitive — a fuel price hike in 1998 triggered rioting that helped topple former dictator Suharto.

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