Jakarta – Hundreds of Indonesian activists rallied outside the presidential palace Monday to protest plans to raise fuel and electricity prices.

The protestors, mostly from the left-leaning Democratic People's Party, said the rises would only further impoverish the poor, Antara news agency reported.

"Reject the hike in fuel prices and electricity and telephone rates," read a huge banner.

Jakarta police spokesman Senior Commissioner Anton Bachrul Alam said police would tolerate rallies as long as they were held peacefully.

The government has yet to decide a date for the increase in fuel prices, earlier planned for January 1 but delayed.

Energy and Mineral Resources Minister Purnomo Yusgiantoro has said the rise would be implemented as soon as possible because further delays would only add to the costs to be borne by the government.

There have been reports that kerosene, used widely for cooking by the poor, is being withheld by distributors from the market pending the announcement of the rise, causing shortages and soaring prices. Alam said police were investigating the reports.

Officials have said cheaper domestic fuel prices, thanks to subsidies, have prompted the smuggling of fuel to other countries where it is sold at much higher prices.

The International Monetary Fund, which has been coordinating a five-billion-dollar aid package, has urged the government to reduce its huge bill for subsidies on fuel.