REPUBLIKA.CO.ID, JAKARTA - Indonesia's President-elect Joko "Jokowi" Widodo plans to raise subsidized gasoline and diesel prices by around 50 percent next month in a bid to bring down the budget deficit in Southeast Asia's largest economy, an adviser told Reuters on Friday.
The new government will be taking a highly unpopular step, but some worries for the minority coalition's future were eased by opposition leader Prabowo Subianto offering qualified support for Jokowi's administration at a joint news conference following the rivals' first meeting since a disputed election in July.
Due to be sworn in on Monday, Jokowi has to urgently address Indonesia's biggest fiscal problem -a 23 billion USD fuel subsidy bill that is the main driver behind the country's twin budget and current account deficits. The adviser said the incoming president plans to raise the price of gasoline by 46 percent, and diesel by 55 percent, possibly as early as Nov. 1, in a move that will save the government nearly 13 billion USD next year.
"It's safe to say they are likely to do it within the first two weeks of taking office," said the adviser, who requested anonymity because he was not authorized to speak to the media.
Raising fuel prices is a sensitive issue that typically sparks protests and contributed to the downfall of long-serving autocrat and then president Suharto in 1998. Jokowi could still amend his plan, the aide said, but whereas the size of the increases will be criticized by opposition parties, the government does not need parliamentary approval to raise fuel prices.
The former Jakarta governor will need support for future tricky decisions, however, and he has sought to mend ties Prabowo after a disputed election that was the closest in Indonesia's history. Their meeting on Friday appeared to ease tensions, though it was unclear whether they discussed a hike in fuel prices.
"Our objectives are the same ... everything will be done for the good of the nation," Jokowi said.
Prabowo, a former general, congratulated Jokowi and saluted him once the press conference was over.
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