JAKARTA: Indonesian president-elect Joko Widodo’s drive to fast-track an increase in fuel prices, one of his key election pledges, have stumbled after incumbent Susilo Bambang Yudhoyono said the conditions were not right at the moment to cut subsidies.
Widodo and Yudhoyono held a two-hour, closed door meeting on the resort island of Bali on Wednesday.
Atop Widodo’s agenda when he assumes the presidency on October 20 is to address a ballooning fuel subsidy bill that is eating up an already tight budget and threatening investor confidence by widening the current account deficit.
Fuel subsidies cost the government around $20bn a year, or 20 percent of its total budget.
Widodo and Yudhoyono had discussed the possibility of introducing a fuel hike as early as September, two sources close to the matter said last month.
“Last night I specifically requested (Yudhoyono) to narrow the budget deficit by raising fuel prices,” Widodo was quoted by Antara news agency as saying.
“He conveyed that conditions are not right at the moment to raise (fuel prices).”
Raising fuel prices is a sensitive issue that could potentially unleash mass protests against Widodo’s government within weeks of him taking office.
REUTERS
