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![A police officer kicks over burning tyres at a rally against rising fuel prices in Jakarta [EPA] A police officer kicks over burning tyres at a rally against rising fuel prices in Jakarta [EPA]](http://mwcnews.net/images/stories/Asia/A/B/1/2/3/4/5/6/7/Indonesia-petrol.jpg) | | A police officer kicks over burning tyres at a rally against rising fuel prices in Jakarta [EPA] | Students have protested in the Indonesian capital after the government announced an about 30 per cent increase in the cost of fuel.
Analysts say that the government's is being forced to cut subsidies in the face of rising global oil prices. Police arrested more than 100 demonstrators on Saturday as protesters threw homemade bombs. Further rallies were held in Surabaya, the country's second-largest city. Purnomo Yusgiantoro, the energy minister, had announced a day earlier that petrol rise 33 per cent to $2.40 a gallon, diesel would go up to $2.25 a gallon and kerosene, used for cooking, would go up $1 - a 25 per cent rise. Critics warn that the poor will be hardest hit by the cut in government subsidies. Wardah Hafidz, co-ordinator of the Urban Poor Consortium, said: "We will fight against this abuse of power by the government. It's unacceptable." The discontent over prices could jeopardise the re-election of Susilo Bambang Yudhoyono, the president, in polls due to be held next year. Vital subsidies The country, like many in Asia, has subsidised fuel for decades. The measure to assist the poor first came in under Suharto, but this year's budget was based on an average oil price of $85 a barrel. This week, oil exceeded $130 a barrel. Ministers say the poor will still be assisted by cash payments. Arbi Sanit, a political observer from the University of Indonesia, said: "People are disappointed with this unpopular policy. It will reduce Yudhoyono's vote at the elections." Long queues formed at petrol stations on Friday as people sought to buy fuel before the rise was implemented at midnight. Other countries could follow suit. Taiwan's new government has decided to end a freeze on domestic petrol prices from June, while Malaysia is reportedly looking at making wealthy consumers pay more for fuel under a new two-tier subsidy system. Millions of Indonesians live on less than $2 a day, although the government says residents enjoy one of the lowest oil prices in the world. The last rise in 2005 of 126 per cent prompted mass demonstrations.
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Tags: Indonesia
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