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Indonesian police, students clash in fuel price protest
15 May 2008 09:24:29 GMT
 Source: Reuters
JAKARTA, May 15 (Reuters) - Indonesian police fired tear gas on Thursday at rock-throwing student activists protesting a government plan to hike fuel prices, local television said.

Metro TV said two students were injured in the clash between police and hundreds of student activists in Makassar, the capital of South Sulawesi province, which was torn by similar protests earlier this month.

The government is due to hold a news conference later Thursday on the fuel price hike. No further details were immediately available.

Anger has been mounting since the government announced it planned to increase prices of heavily-subsidised fuel by a maximum of 30 percent, though it has vowed to protect the poor through cash handouts.

Price hikes are a sensitive issue in Indonesia, where people are already grappling with the high cost of food and millions of people live on less than two dollars a day.

President Bambang Susilo Yudhoyono's predecessor, Megawati Sukarnoputri, was forced to roll back a decision to lift fuel prices after massive demonstrations. A big fuel price increase also led to the rioting that helped topple former president Suharto in 1998.

The clash in Makassar comes in the wake of demonstrations in Jakarta earlier this week when thousands of Indonesians took to the streets to protest against the hike as they marked 10 years after the riots that led to Suharto's downfall.

The Indonesian government faces tough decisions over how to contain inflation and curb an expanding budget deficit as its subsidy bill balloons because of rising global oil prices.

"The government saw that the trend of oil prices will cause subsidies to be higher than the budgeted 126.8 trillion rupiah ($13.65 billion). We estimate if oil prices are like this, it can reach above 190 trillion rupiah," Finance Minister Sri Mulyani Indrawati told reporters late on Wednesday.

Indonesia has some of the lowest fuel prices in Asia. (Reporting by Telly Nathalia; Editing by Sugita Katyal and Valerie Lee) ((Reuters Messaging: sugita.katyal.thomsonreuters.com; Tel: +62-21-384-6364))


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Last updated:Thu May 15 09:21:50 2008