REPUBLIKA.CO.ID, JAKARTA - Jokowi currently plans to raise the price of both gasoline and diesel by 3,000 IDR (0.25 USD) per liter by November, the advisor said. Indonesian fuel prices are now among the cheapest in the region, with gasoline costing 6,500 IDR a liter, and diesel costing 5,500 IDR.

"We would probably oppose it on the grounds it would be too much of a shock to the system," Hashim Djojohadikusumo, a top aide and brother of Prabowo told Reuters last week.

He said opposition lawmakers would likely favor a smaller increase in pump prices, of around 1,000-1,500 IDR.

The government is expected to save 156 trillion IDR (12.76 billion USD) next year in fuel subsidy costs, the adviser said. In the 2015 budget, fuel and gas subsidies make up 13.5 percent of government spending. Jokowi's advisers said the money saved would be diverted to spending on infrastructure, agriculture, education, and health projects.

To offset the higher fuel prices, Jokowi plans to provide the poorest families with 300,000 IDR per quarter until the first quarter of 2016, the adviser said. A further fuel price will be considered in the fourth quarter of 2015, the adviser added. The 2014 budget deficit had been targeted at 2.4 percent of gross domestic product, but it is in danger of busting a budget law setting the limit at 3 percent because of a shortfall in tax revenues and the slowest economic growth in five years.

A fuel price hike of 3,000 IDR in November would save the government 21 trillion rupiah in the last two months of this year, the current Finance Minister, Chatib Basri, said. The planned fuel price hike would add an additional 3-3.5 percentage points to inflation this year, and the inflationary pressures would last around three months, said the deputy central bank governor Perry Warjiyo.

The current estimate for 2014 inflation is 5.3 percent. The fuel price hike will help ease the current account deficit to below 2.9 percent of gross domestic product in 2015 from a projected 3.2 percent this year.

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