Indonesia might raise fuel prices by 40 per cent early next year in a bid to reduce domestic fuel subsidies which have spiked sharply on soaring global prices, local media has reported.

Fuel price hikes are a politically sensitive issue in the impoverished country of 220 million people. Previous fuel price increases have often sparked social unrest as the move usually leads to jumps in the prices of other basic commodities.
“(The hike is) estimated at 40 per cent,” Vice-President Jusuf Kalla was quoted as saying by the Harian Ekonomi Neraca newspaper. He gave no precise timeframe or other details.
The new government of Suslio Bambang Yudhoyono needs to wean the country away from costly fuel subsidies that cover a range of oil products.
The cushion gives Indonesian drivers some of the cheapest petrol in Asia.