March 30 - Fuel price protest turns violent. Sarah Wali reports.
Thousands of demonstrators rally outside the Indonesian parliament on Friday to stop government plans to raise raising fuel prices. Police fired tear gas grenades and used water cannons against the protesters. Earlier in the day protesters blocked access to the toll road connecting the capital Jakarta and its main airport. Leading Indonesian political parties dealt a separate blow to the government by rejecting the planned price increase. The government needs to reduce a swelling budget deficit. Indonesia has the lowest fuel prices in Asia, and is the largest importer of gasoline and diesel. Subsidies keep pump prices at half the market rate, spurring demand and helping boost car sales to record highs. The central bank has warned that a fuel price hike will push inflation above its target to over 7 percent. It is also likely to dampen consumer spending, the main driver of the Indonesian economy. But economists say weaning consumers off subsidies is critical to the country's long-term financial health. Sarah Wali, Reuters.