Indonesia’s state-owned oil and gas firm Pertamina bowed to government pressure and cut the price of liquefied petroleum gas (LPG) after the president raised concern about the impact of a sharp increase days earlier on the poor.

Indonesia is due to hold general and presidential elections this year and the 65 per cent increase in the LPG price on January 1 prompted a call from President Susilo Bambang Yudhoyono for a review of the decision.

“Although this decision is fully under Pertamina’s authority and is not something that had to be reported to the president, I think the government must handle the issue because it concerns the general public,” Yudhoyono said on Twitter, calling for a review of the increase in 24 hours.

“Such a policy ... which will ultimately burden the poor, has not been well-coordinated. This should not be allowed to happen.”

Pertamina lowered the price increase, to about 18 per cent, to 6,850 rupiah (56 cents) per kg of LPG, State-owned Enterprises Minister Dahlan Iskan told reporters after a meeting with Pertamina officials. The decision on the LPG price reinforces concern that Indonesia is unlikely to see significant economic reform ahead of the elections despite sizeable budget and current account deficits that have cast gloom over Southeast Asia’s biggest economy.