Govt to announce fuel price hikes on Friday evening

The government is scheduled to announce the new fuel price hikes at 10 p.m. on Friday after the relevant decree has been signed by President Susilo Bambang Yudhoyono, a minister said on Thursday.

"The President will preside over a limited Cabinet meeting, and if he is satisfied with the subsidy and compensation plans, he will sign the decree (for the fuel price hikes) ... and we will announce it at 10 p.m. tomorrow," Coordinating Minister for the Economy Aburizal Bakrie said.

He explained that out of a fuel subsidy allocation of Rp 89 trillion (US$8.9 billion), as approved by the House of Representatives, Rp 78 trillion had already been spent. The remaining Rp 11 trillion would be disbursed over the next three months based on subsidies of between Rp 800 and Rp 1,000 per liter, he said.

"Kerosene will continue to receive the highest subsidy, while the subsidies for diesel and premium gasoline will be reduced so as to bring their prices roughly up to economic prices," Aburizal said.

The minister said that it was expected that kerosene would be sold at its economic price by 2007, while diesel and premium gas prices would reach economic levels by the end of next year.

"After reaching their economic prices, they will later be adjusted up to the market price," he added. (*)