Fuel prices to be raised by 20-25 percent: Purnomo

The government said on Thursday it will raise fuel prices by 20-25 percent this month, and not 30 percent as widely expected.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the 20-25 percent hike was based on the assumption that world oil prices will drop to US$19-20 per barrel in 2002.

With that estimate, the government will still be able to cut fuel subsidies in the 2002 state budget to Rp 30.4 trillion ($2.92 billion), the minister told reporters after a cabinet meeting.

?The basic assumption is that world oil prices would stay at between $19-20 per barrel. After making calculations it was concluded that fuel prices not necessarily be raised by 30 percent in order to meet the Rp30.5 trillion target,? Purnomo said.

The Rp 30.5 trillion target was based on an assumed budget price of $22 a barrel. However, OPEC's crude basket is currently less than $20 a barrel.

Last October Indonesia's parliament approved an average 30 percent increase in domestic fuel prices for this month.

But Purnomo on Thursday did not mention the exact date of the increase. (leo)