Government considers cutting fuel price

President Susilo Bambang Yudhoyono said Tuesday the government was considering lowering government-set prices on subsidized fuels following the decline in the price of crude oil worldwide.

"We are intensively discussing that possibility right now. If we see general support, I will take the decision to cut the price," he said.

Bloomberg reported slower global economic growth has pushed oil back to its lowest price since May 2007, at US$63.22 a barrel in New York yesterday.

Indonesia raised fuel prices in May 2008 by more than a quarter, the first increase in three years, to reduce the proportion of subsidies after crude oil hit a record $135.09 a barrel. The 2008 fuel-subsidy allocation amounts to 180.3 trillion rupiah ($16.7 billion).

"The decreasing crude-oil price will definitely reduce the government subsidy's burden on the budget, but it could also cut into our expected revenues from oil. This is one factor. Other factors include how this affects the value of the rupiah, which we are also taking into consideration," Yudhoyono said. (dre)