DPR Votes On Fuel Subsidies

University of Indonesia students argue with House of Representatives security officers during a plenary session on the revision of the 2012 state budget early Saturday. The students were forced to leave the hall's balcony because they were interrupting the voting process. The House, through a dramatic voting process, agreed to increase subsidized fuel prices within six months if the Indonesia Crude Price (ICP) is 15 percent higher than assumed in the state budget. (JP/R. Berto Wedhatama)

Here’s a brief summary from The Washington Post of the what happened in the Indonesian parliament yesterday regarding the potential increase in fuel prices:

Indonesia’s parliament voted Saturday to block the government’s plan to raise fuel prices by more than 30 percent this weekend, but it allowed for a future price hike under certain conditions.

The government was set to raise the price of gasoline from around 50 cents to 65 cents per liter on Sunday. It says it has no choice but to cut budget-busting fuel subsidies, which have for years enabled motorists to fill up for roughly $2 per gallon.

The 550-seat house voted early Saturday to allow a price hike only if the average price of Indonesian crude in six months soars 15 percent above $105 per barrel, to $120.75 per barrel. The average price of Indonesian crude is now $116.49 per barrel.

In a plenary session marred by interruptions, heated debates and walkouts, 356 legislators voted to approve the conditional price hike, while 82 rejected it.

Led by the opposition Indonesian Democratic Party of Struggle, 93 lawmakers who reject any price hike at all stormed out as the vote was under way.

The vote came amid massive street protests in major cities against the plan, and more than 2,000 policemen and hundreds of soldiers guarded the parliament complex.

It will be interesting to see how this is interpreted going forward.  Was this a victory for the populist protesters or is the government just kicking the can down the road, delaying the inevitable?  Does it mark the hardening of lines between political coalitions, with members Hanura & PDI-P walking out on the vote?

According to Detik.com, both the metal workers union (Federasi Serikat Pekerja Metal Indonesia – FSPMI) and opposition parties are planning on challenging the constitutionality of the decision in court.


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