Poor ‘to Get $1.5bn to Offset Fuel Price Hike’

JAKARTA ~ The central government plans to transfer more than US$1.5 billion in cash to the poor to offset the cost of a planned hike in fuel prices, local media reported on Thursday.

The compensation program would see Rp14.18 trillion ($1.53 billion) 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 Rp100,000 per household.

The government announced its intention to raise fuel prices last week, with rising global oil prices meaning it is spending increasing amounts on its multibillion-dollar subsidy scheme.

The price rise would be no more than 30 percent on average, Bakrie said.

A 30-percent rise would see the cost of premium gasoline climb to Rp6,000 (65 cents) a liter from Rp4,500.

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 favor with voters ahead of elections next year.

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

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