Published on September 9th, 2022 | by Subhash Nair0
Fuel Price Hike In Indonesia Triggers Protests
The first fuel price hike in 8 years for Indonesia was met with public disorder.
Much like Malaysia, Indonesia has run on an extensive fuel subsidy regime for decades. This has helped keep living costs down and to boost the economy. However, in the last year, the Indonesian government has faced tremendous pressure. Global fuel prices have surged over the last year. This has caused the Indonesian government to triple its energy subsidy spending for 2022 versus their original budget of 502.4 trillion Rupiah (US$33.83B). All of this additional spending has been to keep fuel prices and power tariffs unchanged for the Indonesian population.
Practically overnight, fuel prices in Indonesia were increased by 30%. 90-octane (roughly equivalent to our RON95) petrol sold as Pertalite went up in price from 7,540 rupiah (~RM2.28) per litre to 10,000 rupiah (~RM3.03) per litre. The more expensive 92-octane fuel, known as Pertamax also saw a price hike from 12,500 rupiah per litre to 14,500 rupiah per litre.
Diesel, which in Indonesia is heavily mixed with biodiesel (a rough 70:30 ratio) also saw a small price increase from 5,150 rupiah per litre to 6,800 rupiah per litre. It is still roughly half the price of what it actually costs to produce, which is 13,950 rupiah per litre.
Over the last few days, members of trade unions, farmers, fishermen, students and more have taken to protesting the price hike in front of the parliament building in the capital and in front of provincial governor’s offices. According to reports from various news agencies, over 7,000 police officers have been dispatched to petrol stations and around Jakarta to keep the peace.
The Indonesian government has tried to soften the blow by carrying out other measures, such as direct cash transfers. The last time Indonesian fuel prices were raised was back in 2014, shortly after Joko Widodo first took office as President.
In Malaysia, the price of RON95 petrol and diesel have been kept pretty constant throughout the last year. The Malaysian government has not given any signs of changing this, but it should be noted that there is an election coming around the corner. Who knows how long the fuel subsidies will hold up once the election is over?