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resident Susilo Bambang Yudhoyono hopes that lawmakers will cooperate with the government regarding the financial aid to be given to the poor as compensation for the planned increase in fuel prices.

In his closing statement at Wednesday's Cabinet meeting, Yudhoyono said that the compensation would be needed so that poor people would not be seriously affected by the fuel price hike.

He said that the compensation would be part of the revisions to the 2013 state budget to be deliberated by the House of Representatives in May.

The revisions will also include a cut in the economic growth target to between 6.3 percent and 6.4 percent from the present 6.8 percent.

Other budget assumptions, including the oil lifting (net production) target will be also reduced to about 800,000 barrels per day from the 900,000 bpd in the current budget.

The government had planned to increase the price of subsidized fuel for privately owned cars to Rp 6,500 (67 US cents) per liter from Rp 4,500 per liter at present, and maintain the fuel price for public vehicles and motorcycles.

 However, due to the complexity of the dual-price system, the government later decided to increase the price for all vehicles. As a result, the government will have to discuss with legislators an aid package for the poor as compensation.

Fuel price uncertainty was a factor in the downgrading of Indonesia's credit rating. Last week, Standard and Poor's lowered the outlook for Indonesia to 'stable' from 'positive' due to delays in economic reforms including subsidized fuel prices.

Moody's has also warned it could cut Indonesia's rating if the uncertainties regarding the fuel prices and fuel subsidies continued.

In the 2013 state budget, the government allocated Rp 274.74 trillion (US$28.6 billion) for energy subsidies, comprising Rp 193.80 trillion for fuel and Rp 80.93 trillion for electricity. By comparison, the government spent Rp 202.35 trillion in energy subsidies in 2012.

The amount spent on fuel subsidies was higher than the government's capital expenditure for infrastructure projects, which accounted for Rp 140 trillion last year.

Yudhoyono promised that he would urge legislators not to spend too much time deliberating the compensation package so that the fuel price hike could be implemented immediately.

'I will meet with the House leaders [to talk about the draft] while the government will also engage in intensive communication with the House members soon,' the President said.

Golkar Party chairman and businessman Aburizal Bakrie, who met with Yudhoyono at the Presidential Office to discuss the matter earlier in the day, said he agreed with the fuel price hike plan.

Aburizal said he discussed the measures needed to get fuel subsidies back on track and how best to target subsidies, criticizing the fact that those who most benefited from the high subsidies were middle- and upper-class consumers.

'As a result, the government has less ability to build infrastructure and provide welfare,' he said. 'Taking the necessary measures will lead to a rise in fuel prices.'

Aburizal said that brief economic turmoil was unavoidable due to the fuel price hike. 'But, there will be 20 percent savings returned to the people,' he said, adding that the government would keep improving social welfare programs and infrastructure.

However, he claimed he did not know what price the government would set, saying that was a matter for the government.

'Political parties are established not merely to win elections, but they also must side with the people,' he said.