Wahyudi Soeriaatmadja and Linda Yulisman – Indonesia's decision to raise fuel prices is a prudent one that will ease its growing fiscal burden, but the daily street protests against the policy need to be dealt with properly, say analysts.
They estimate that the price hike on Sept 3 would save between 100 trillion rupiah (S$9.5 billion) and 200 trillion rupiah in energy subsidies this year, which could be channelled to productive spending as South-east Asia recovers from the pandemic downturn.
Had there been no price increase, the subsidies might balloon to as much as 700 trillion rupiah from 500 trillion rupiah due to the impact from the war in Ukraine.
'I can barely save', says motorcycle taxi driver
Ride-hailing motorcycle taxi driver Agus Tri Atmoko has been spending 40,000 rupiah (S$3.80) on fuel every day, around 30 per cent more than in the past since the Indonesian government raised fuel prices.
The 47-year-old father of three now spends less on fried snacks that he buys, along with a cup of coffee, for his day-long rides across Greater Jakarta.
"It's really tough these days. I barely save money," Mr Agus told The Straits Times while waiting for passengers near a train station in Central Jakarta.
Lower-income workers pin their hopes on higher wages
The recent rise in fuel prices has been especially tough for Indonesian shoe factory workers Dimas Satrio Wibowo and Novi Dirgantini.
The couple ride their motorbikes to their workplace a few kilometres away from home in Tangerang regency on the outskirts of Jakarta – their only means of getting to work as they have no public transport alternatives.Mr Dimas, 29, a production operator, who earns around 4.2 million rupiah (S$396) monthly, used to spend about 100,000 rupiah a week for Pertalite, the most popular fuel brand in Indonesia.