Unions and student organisations have vowed to increase protests against the government’s elimination of a gasoline subsidy.
On September 8, 2022, in Jakarta, Indonesia, student activists wave flags as they burn a tyre as part of a protest over steep rises in gasoline costs.
Yesterday, hundreds of students demonstrated for a fourth day in a row in the capital and other cities of Indonesia to denounce the steep hikes in petrol costs brought on by the elimination of a government fuel subsidy.
After Jokowi reduced fuel subsidies in an effort to avoid a multi-billion dollar budget blowout last weekend, the price of subsidised gasoline and diesel increased by roughly a third. For the first time since 2014, this increased the cost of subsidised gasoline from 51 cents to 67 cents per litre and diesel from 35 cents to 46 cents.
The Associated Press reports that demonstrators gathered yesterday at Monas, Jakarta’s National Monument honouring the country’s independence fight. Some protesters set tyres on fire, while others hoisted flags and erected banners declaring their rejection of gasoline price increases.
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As a result of rising global oil prices and the depreciating value of the Indonesian rupiah, President Joko “Jokowi” Widodo’s administration has spent months using billions of dollars to protect the Indonesian people from rising prices for cooking oil, oil, and other necessities. However, Jokowi said last month that as a consequence, the state’s budgetary allocation for subsidies was increased from 152 trillion rupiah ($10.2 billion) to 502 trillion rupiah ($33.8 billion).
The action, as anticipated, instantly sparked demonstrations from students, workers, farmers, fishermen, and teachers in places all around Indonesia. According to the demonstrators, many ordinary people would be negatively impacted by the increase in fuel costs, who are already suffering from inflation and the COVID-19 pandemic’s economic ramifications.
Reuters reporter Stanley Widianto saw a shirtless protester on September 6 “with feet shackled to an empty petrol tank, carrying a sign highlighting the hardship brought on by rising costs,” while covering a demonstration. According to The Associated Press, Said Iqbal, the president of the Confederation of Indonesian Trade Unions, workers are considering a national strike unless the fuel price increase is reversed.
Even if the protests have so far been kept in check, they highlight the political sensitivities brought on by the growing costs of necessities. The social compact in Indonesia has long included a pledge to control the price of these goods; as a result, the government has interfered in the market in a number of different ways. As I said last week, the government has lately taken efforts to limit the price of energy by prohibiting coal exports to assure enough supply for local power generation, amid the skyrocketing prices caused by the Russia-Ukraine war (which also sparked riots).
The government of Jokowi is well-positioned to weather the political storm. As his second and last term in office draws to a close, the president is in charge of a broad legislative coalition that includes the majority of the nation’s leading political parties. In order to offset the rising cost of fuel and the potential for inflation in other areas of the economy, it has also promised to provide direct cash transfers and other forms of compensation to 20 million needy households.
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