But no party wants to be seen as the one that increased the price of fuel, said Mr. Sulaiman, particularly not with 2014 elections coming up.
A distorted economy
Indonesia was a member of the Organization of Petroleum Exporting Countries (OPEC) until 2008. It now depends on imports to meet domestic demand, but thanks to long-running subsidies, people pay around $2 a gallon for gas, the lowest price in all of Asia.
The government last raised fuel prices in 2008, though it dropped them again in the run up to elections the following year. The protests at that time were less dramatic because fuel price hikes had more support then, say analysts.The problem now is that people are being forced to sacrifice without a guarantee that politicians won’t use the savings to fill their own pockets.
“There were protests then, as always, but not like this,” says Chatib Basri, vice chairman of Indonesia’s National Economic Committee. “Political trust is low because of scandals related to the ruling party.”
Despite winning a landslide election in 2009 by promising to eradicate graft, President Susilo Bambang Yudhoyono has been battling widespread corruption allegations against his Democrat Party. Meanwhile, the country’s economy has been growing at an average of more than 6 percent, but a lack of infrastructure and bureaucratic bottlenecks still pose challenges to investors.
Mr. Basri said the government should have raised the price of fuel last year, when global prices first started rising.
