JAKARTA - INDONESIA will cut retail prices of premium gasoline by more than six percent from Dec 1 to ease inflation and spur economic growth, the finance minister said on Thursday.
'A catalyst for the price cut is the growing concern over global economic turmoil, which could affect the national economy,' Ms Sri Mulyani Indrawati told reporters.
The government was responding to public demand for cheaper fuel, she said.
The price will be cut by 500 rupiah (S$0.07) a litre. Local petrol stations currently sell fuel for around 7,000 to 8,000 rupiah a litre.
'The government will evaluate premium prices monthly in relation to movements in world oil prices so that fuel prices are at a level to suit our budget.'
Diesel and kerosene prices will not be altered, Ms Mulyani said.
Indonesia raised fuel prices in March by an average of around 30 per cent to contain the spiralling cost of its multibillion-dollar subsidy scheme in the face of high global oil prices.
The decision prompted rowdy protests on the streets of Indonesia's cities and dented the popularity of President Susilo Bambang Yudhoyono.
Oil prices have more than halved since reaching record highs above US$147 (S$218.11) a barrel in Jul. As of Thursday, the price of light sweet crude for Dec delivery dropped to US$63.98 a barrel in New York. -- AFP
