Jakarta – The Indonesian government and parliament should meet to discuss the impact of fuel subsidies on the nation's budget, Mines and Energy Minister Susilo Bambang Yudhoyono said yesterday.

"I think the government's decision to delay the domestic oil product prices increase is the correct decision," he said. "Therefore, let us recalculate. The government and parliament must sit together to see the implications, and how to find a solution."

The government had good reason to increase oil product prices, Mr Yudhoyono said, because the subsidies were given to the wrong target. They benefited the rich, he said, while the poor ultimately had to pick up part of the cost of financing them. "We have to find a way to make the subsidies fair," he said.

Last Friday, the government announced it would delay a controversial rise in fuel prices, which had stirred fears of mass unrest, just hours before they were due to take effect. Student and worker groups said they still planned to protest. But the mass demonstrations failed to materialise on Saturday, with only modest rallies reported in Jakarta.

Analysts said the move would help calm public anger but risked causing further damage to Indonesia's relations with the International Monetary Fund (IMF), which has postponed payment of a $400-million loan tranche over concern at the slow pace of economic reforms. Cutting subsidies was a key part of Indonesia's reform pledges to the IMF and a central plank of the April- December budget.