Jakarta – Street protests hit the Indonesian capital of Jakarta for the second day in a row Friday over the government's decision to raise fuel prices by an average 22 percent.

Some 500 protesters from the Student Executive Body and the radical Front for the Defenders of Islam (FPI) staged a joint rally outside parliament, demanding that the government arrest corrupt officials and seize their assets rather than raise fuel prices.

They set fire to several tyres and an effigy of parliament speaker Akbar Tanjung, now a guspect in a 3.8 million dollar corruption case.

"It is illegal for the government to increase fuel, electricity, telephone and staple food prices as long as corruption remains alive," an FPI banner read.

The student protesters demanded that government "lower all prices and eradicate corruption, collusion and nepotism".

Police diverted traffic but did not try to break up the protest. Jakarta police had gone on high alert Wednesday with all leave cancelled in anticipation of major protests but demonstrations so far have been smaller than expected.

Energy Minister Purnomo Yusgiantoro said the fuel price increases, announced late Wednesday, and a new pricing formula were necessary to ease the budget burden and curb the smuggling of fuel out of the country.

Under the new formula the government will peg most prices to world market prices.

Jakarta has tried to cushion the effect on the millions of poor by earmarking 2.85 trillion rupiah (273.64 million dollars) in various benefits.

The oil subsidy for this year is budgeted to cost the government 30.377 trillion rupiah (2.95 billion dollars) against 53.774 trillion in 2001.

The International Monetary Fund, which is coordinating a five billion dollar aid package for Indonesia, has demanded a cut in the fuel subsidies.