An attendant fills up the tank of a motorbike at a gasoline station in Jakarta, Indonesia, Sept 3, 2022. (TATAN SYUFLANA / AP)
JAKARTA – Indonesia's President Joko Widodo on Wednesday 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 subsidized fuel prices by 30 percent on Saturday, sparking protests across the nation of 270 million people.
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"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.
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 … Regional (governments) must take action like during the (pandemic)
Joko Widodo, Indonesia's President
"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.
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The August inflation rate was 4.69 percent, 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 programs 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 conflict in Ukraine, which he said would continue to affect global supplies for a while yet.
READ MORE: Indonesia hikes fuel prices to rein in ballooning subsidies
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.