Indonesia says cannot rule out more fuel price hikes

By Harry Suhartono and Fitri Wuladari

NUSA DUA, Indonesia (Reuters) - Indonesia cannot rule out further hikes in fuel prices ahead of the 2009 presidential elections, Energy Minister Purnomo Yusgiantoro said on Sunday, due to the impact of fuel subsidies on the budget.

The government raised fuel prices by almost 30 percent last month, sparking protests in a country where millions are already suffering from rising energy and food costs.

While Indonesia still has some of the lowest fuel prices in Asia, the issue of fuel subsidies is politically sensitive given Indonesia is due to hold parliamentary and presidential elections next year.

"The increase is about fairness. Subsidised fuels have been enjoyed by the haves," rather than the have-nots, Yusgiantoro said on the sidelines of the Coaltrans Asia Conference on the resort island of Bali.

Asked whether the government could guarantee there would be no more increases in fuel prices before the next presidential election due by mid-2009, Yusgiantoro said that was not possible.

"We cannot guarantee, we never know what happens in the future," he said, adding that between 1965 and 2000, Indonesia had increased fuel prices on 30 separate occasions.

When the government more than doubled fuel prices in October 2005, consumption fell significantly.

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