Goverment hands out cash to the poor to soften the blow of 30 percent rise in fuel pricesIndonesia is handing out US$1.5 billion (Rp14.1 trillion) in cash to its poorest residents to soften the blow of big fuel price rises a move that might bring the government short-term relief after weeks of protests.
The last fuel price rise in Indonesia was a whopping 126 percent in 2005, sparking mass demonstrations but no long-term unrest.
Analysts welcomed the rises and said other Asian would have to follow suit or watch their budgets break under the weight of massive fuel subsidies.
Taiwan's new government has decided to end a freeze on domestic gasoline prices from June, while Malaysia is reportedly looking at making wealthy consumers pay more for fuel under a new two-tier subsidy system.
Even regional giant India is reeling from the oil price onslaught, with the petroleum secretary admitting Friday that a fuel price hike was "inevitable" to bail out state oil firms selling at hugely discounted rates.
"I think this move is positive for Indonesia in terms of its fiscal position, It looks like that's where most governments are heading right now." Royal Bank of Scotland economist Euben Paracuelles said in Singapore on Friday.
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