But given the economic difficulties and the mood of Indonesians these days, there will never be a right time for any price increase. And by postponing the inevitable, problems are bound to multiply, not go away, observers say. The planned increase was part of government efforts to gradually reduce fuel subsidies that have for decades kept local oil prices below international standards.
Analysts say domestic fuel prices are among the cheapest in the world due to the subsidies.
But amid threats of mass unrest, the Indonesian government cancelled plans to raise fuel prices by 12 percent on March 31. The move averted what could have been a string of increases in prices of commodities, transport fares, electricity rates and other services. More importantly, it avoided the wrath of the Indonesian public. But by postponing the unpopular, the government only prolonged its agony. It now has to continue subsidizing fuel prices, in effect leaving little resources for other priority spending and keeping a huge budget deficit.