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Fuel prices jump in Indonesia as subsidies are cut

June 22, 2013 at 6:42 PM

JAKARTA, June 22 (UPI) -- Aid to poor families to make up for higher fuel prices in Indonesia will offset the impact of cuts in fuel subsidies, analysts said Saturday.

The price of gasoline jumped from 4,500 rupiah (about 45 cents) per liter (0.26 gallons) to 6,500 rupiah (65 cents) Saturday, the Jakarta Globe reported. Diesel went from 4,500 rupiah to 5,500 rupiah (55 cents) per liter.

At the same time, the government began sending payments to low-income Indonesians. National Development and Planning Minister Armida Alisjahbana said that 15.5 million people are eligible with families getting $302 a year in two installments.

Anton Supit, chairman of the Indonesian Employers Association, accused the government of playing "political games." He said the association hoped that savings from the cut in fuel subsidies would be used to fund education and infrastructure programs.

Faisal Basri, an economist, said he believed most Indonesians would support rising fuel prices if they believed politicians are honest. He said the direct payments will have little long-lasting impact on the families that receive them.

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