Indonesia's Jokowi pledges to eliminate fuel subsidies slowly: media

JAKARTA Thu May 1, 2014 10:06pm EDT

Joko Widodo looks on during PDIP party campaign in Jakarta March 16, 2014. REUTERS/Beawiharta

Joko Widodo looks on during PDIP party campaign in Jakarta March 16, 2014.

Credit: Reuters/Beawiharta

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JAKARTA (Reuters) - Indonesian presidential frontrunner Joko "Jokowi" Widodo said he would gradually eliminate costly fuel subsidies over a four year period if he wins a July election, The Jakarta Post newspaper quoted him as saying on Friday.

Fuel subsidies, which the government argues largely benefit the rich, cost the government around $20 billion a year and put pressure on the current account deficit.

"In four years, the fuel subsidy should be eliminated gradually, step by step, until it's gone," Jokowi said on the sidelines of a national development planning conference on Wednesday, according to The Jakarta Post.

President Susilo Bambang Yudhoyono raised fuel prices last year, but the issue is politically sensitive and attempts to go too quickly have been met with strong resistance and demonstrations.

Analysts have warned that the budget deficit could hit the legally-binding limit of 3 percent of gross domestic product if the government does not hike fuel prices this year.

Ex-general Prabowo Subianto, of the Gerindra Party, is running a distant second to Jokowi in opinion polls. The presidential election is on July 9.

(Reporting by Randy Fabi; Editing by Ed Davies)

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