JAKARTA: Indonesia's President Joko Widodo on Wednesday (Aug 7) said he has asked provincial governments to use their budgets to rein in transportation costs and counter the inflationary impact of last week's fuel price hike.
Under pressure to control a ballooning energy subsidy budget, President Widodo, popularly known as Jokowi, hiked subsidised fuel prices by 30 per cent on Saturday, sparking protests across the nation of 270 million people.
"The calculation by my ministers was (inflation will) rise by 1.8 percentage points. But that's if we do nothing. I don't want to do nothing, we have to intervene," Jokowi said, referring to the knock-on inflationary impact of higher fuel prices.
"Regional (governments) must take action like during the (pandemic)," the president said, adding that he told provincial leaders to use their budget to cover rising transportation costs, especially for distribution of basic foods like shallots and eggs.
The August inflation rate was 4.69 per cent, already near a seven-year high and above the central bank's target for a third straight month due to rising food prices.
The president made no mention of protests that have flared up since his announcement. His ministers have sought to ease tensions by emphasising that money is being pumped into to state welfare programmes to soften the blow from rising inflation.
Jokowi called on the public to unite to weather the energy and food crises that have emerged due to the war in Ukraine, which he said would continue to affect global supplies for a while yet.
Thousands of people joined protests across Indonesia this week against the fuel price hike, but analysts say Jokowi is well placed to weather the storm due to strong political backing.