The Indonesian government might consider raise prices of subsidized fuels in the country to prevent the growing subsidy bill from getting even larger with oil prices on the global market reaching records every week. Indonesia - a diesel and gasoline importer - provides hefty subsidies for fuel that is used by consumers, but with oil prices far above the 95 US dollar per barrel this becomes increasingly expensive.

“There is an option to raise the fuel price if global prices go beyond $95 a barrel budget assumption for 2008,” said an official at the Ministry of Mining, who declined to be identified. “If oil prices go higher and the subsidy passes the ceiling, then the government has to find a way to keep agreed subsidy level in place.” No further details were given by the official……

Just last week, vice-President Jusuf Kalla also said that prices of subsidized fuels in the country could be raised to relieve pressure on the state budget. The government however has said in the past that there were no plans to raise prices, which would also be a politically unpopular move ahead of the presidential elections in April 2009. The government has now triplet the amount of money for subsidy to 126.6 trillion Rupiah (8.8 billion euro) in the revised state budget for 2008. Subsidy for electricity rose to 60.3 trillion Rupiah (4.2 billion euro) from just 29.8 trillion Rupiah (2.1 billion euro) in the original state budget for the current year.