Indonesian MPs reject fuel price hike

“There will not be a hike in the fuel price in the near future,” house speaker Marzuki Alie told the parliament on Saturday.

The Indonesian parliament started debating the issue at 9 a.m. local time (0100 GMT) on Friday and continued the session until after midnight on Saturday. In the end, the majority of lawmakers rejected the proposal of an immediate price hike.

President Susilo Bambang Yudhoyono’s government had planned to raise prices from April 1 to lessen subsidy costs, arguing that the country could not pay for the fuel subsidies that consumed 11 percent of the state budget in 2011.

The ruling party had aimed to use the revenue to control the country’s swelling budget deficit.

But its plan was frustrated by lawmakers, following weeks of almost daily protests.

Earlier on Friday, Indonesian police clashed with protesters opposed to the government plans.

Police in the capital, Jakarta, used water cannons and tear gas against protesters. Clashes escalated as tens of thousands of protesters threatened to bring down the government if it went ahead with the fuel price hikes.

They also blocked the entrance to a toll-road and threatened to keep it that way unless the government reversed its decision.

GJH/MF/GHN

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