Indonesia to review minimum wage rules after protests over fuel price hike

Indonesian students protest against rising fuel prices, near the Presidential Palace in Jakarta, on Sept 9, 2022. PHOTO: EPA-EFE

JAKARTA - Indonesia will review minimum wage and other labour rules, the president's office said on Tuesday, after trade unions staged nationwide protests against a recent hike in petrol prices that they say has come even as incomes stagnate.

President Joko Widodo raised subsidised fuel prices in South-east Asia's largest economy by 30 per cent earlier this month to rein in a spiralling energy subsidy budget, sparking protests by workers and students across the country.

The fuel price hike is set to accelerate inflation, which has already reached its highest since 2015 due to rising food prices.

Mr Heru Budi Hartono, chief of the president's office, on Monday met with workers protesting at the presidential palace in central Jakarta to discuss their demands, according to a palace statement.

Workers have called for a change in the formula used by the government to determine annual increases in minimum wage, and for changes in the Job Creation law, Mr Heru said in the statement, referring to the controversial legislation passed in 2020 that unions said was too pro-business.

The authorities are set to review the workers' demands on Tuesday, Mr Heru said.

Indonesia's inflation saw year-on-year figures of 1.68 per cent and 1.87 per cent in 2020 and 2021, respectively. But the consumer price index surged to 4.94 per cent in July due to global supply chain disruptions and surging commodity and energy prices.

Meanwhile, minimum wage rose by an average of only 1.09 per cent in 2022 across the nation of 270 million people, media reported.

Mr Hermanto Ahmad, secretary-general of labour union KSPSI, was quoted in the palace statement as saying that the fuel price hike will have a knock-on effect on prices of other necessities.

The KSPSI did not respond to Reuters' request for comment.

Another labour group that has been organising rallies, the KSPI, will continue protesting until the government reverses the fuel price hike, its chairman Said Iqbal told Reuters on Tuesday. REUTERS

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