Indonesia: Protests Quash Reform
Photograph by Binsar Bakkara, AP
Smoke from burning tires billows around an Indonesian man protesting the government's effort at fossil-fuel subsidy reform earlier this year. More than 80,000 Indonesians took to the streets in sometimes violent demonstrations that ultimately forced the government to back off its plan to raise fuel prices by 33 percent.
Gasoline prices here are among the cheapest in Asia, but the costs—$16 billion in 2010—have ballooned the nation's budget deficit. Indonesia once was a net exporter of oil, but now it is heavily dependent upon imports to meet demand, and high global oil prices have taken a toll.
Like Egypt, Indonesia sees some hope for reducing its subsidy costs by switching consumers from oil to cheaper natural gas. It already has significantly reduced its kerosene subsidies with a program to convert households to LPG as a cooking fuel, according to a report by the International Institute for Sustainable Development.
In a program that initially will be focused in the Java-Bali area, the government now has plans to convert large numbers of vehicles to run on compressed natural gas and liquid natural gas, and to develop the infrastructure—including filling stations—to support the switch. If successful, the program would be rolled out nationwide.
Read More
Read More
