Oil report

Indonesia to lift gasoline price by 33 pct -minister

JAKARTA, May 22 (Reuters) - Indonesia plans to increase the price of subsidised gasoline by 33 percent and diesel oil by 27.9 percent, as part of government moves to cut expensive oil subsidies, the energy minister said on Thursday.

Indonesia, Asia’s top diesel and gasoline importer, provides heavy subsidies for fuel that shield consumers from the global price of crude oil, which has topped $135 a barrel, way above an Indonesian budgetary assumption of $95 a barrel.

Finance Minister Sri Mulyani Indrawati has said fuel prices will be increased by an average of 28.7 percent and the timetable would be announced on Friday.

“We plan to increase (subsidised) gasoline prices to 6,000 rupiah (64 U.S. cents) per litre and raise the diesel oil price to 5,500 rupiah,” Energy Minister Purnomo Yusgiantoro told a parliamentary commission.

The subsidised gasoline price is currently 4,500 rupiah a litre and subsidised diesel oil 4,300 rupiah a litre.

The minister said subsidised kerosene prices would be increased to 2,500 rupiah a litre from 2,000 rupiah.

In October 2005, the current administration of President Susilo Bambang Yudhoyono more than doubled subsidised fuel prices, pushing inflation to a near six-year high of 18 percent and rocking the automotive, banking and manufacturing sectors.

There have been a series of demonstrations since the government confirmed plans last week to lift prices of heavily subsidised fuel by up to 30 percent, although it has vowed to cushion the impact on the poor through cash handouts.

The government has allocated 126.8 trillion rupiah ($13.6 billion) for fuel subsidises for this year in its budget, or about 13 percent of total government spending of 989.5 trillion rupiah.

Price hikes are a sensitive issue in Indonesia, where millions live on less than $2 a day and have had to cope with rising prices of rice, cooking oil and now fuel.

($1=9,315 Rupiah)

Reporting by Muklis Ali; Editing by Ed Davies