Govt will not hike power, fuel prices: President

President Susilo Bambang Yudhoyono said the government will not hike fuel and electricity prices next year in order to keep a lid on inflation and to support a recovery of people's purchasing power.

"We do not want to take risks on inflation. We also are taking into consideration the (issue of) people's purchasing power," he was quoted by XFN Asia as saying during a visit to the head office of state electricity distributor PT Perusahaan Listrik Negara (PLN).

Without any tariff hike, the government will continue to subsidise both PLN and fuel distributor PT Pertamina for selling power and fuel products below their commercial prices.

"The government takes the option to pay a subsidy though it must be manageable," he said.

The government still subsidises the prices of fuel products for transportation and household consumption. Prices were last hiked by an average of 126 pct in October last year, prompting a sharp upward spike in average annual inflation in 2005 to 17.11 pct.

For next year, the government has allocated fuel subsidies of up to 68.6 trln rupiah and power subsidies of 25.8 trln rupiah. (*)