JAKARTA: Thousands of people rallied in Indonesia's biggest cities on Tuesday, demanding the government reverse its first subsidised fuel price increase in eight years amid soaring inflation.

Under pressure to control a ballooning energy subsidy budget, President Joko Widodo on Saturday said he had little choice but to cut the subsidy and let fuel prices rise by about 30% in the country of 270 million people. Oil prices are about 32% higher than a year ago. 

Protests took place in and around the capital, Jakarta, and in the cities of Surabaya, Makassar, Kendari, Aceh, and Yogyakarta, among a series of demonstrations led by students and labour groups that police say could draw big crowds this week.

Thousands of police were deployed across Jakarta, many guarding petrol stations, fearing they could become targets of mounting anger over a price increase that unions say will hurt workers and the urban poor the most.

"Workers are really, really suffering right now," said Abdul Aris, a union official, vowing to keep fighting until the government gives way.

Small rallies took place at the weekend and on Monday, with tyres burned and some roads blocked as demonstrators vented their anger over the decision, which comes amid rising food costs and with the economy still reeling from the impact of the coronavirus pandemic. 

Thousands gathered in Jakarta on Tuesday, marching and chanting slogans denouncing the government's decision and calling for an increase in the minimum wage.

One demonstrator was seen shirtless with feet shackled to an empty petrol tank, carrying a sign highlighting the hardship brought by rising costs.

SENSITIVE ISSUE

Textile factory worker Adi Asmadi, 29, said his daily transport expenses would go up sharply.

"If the fuel price is hiked and wages increase too, that's OK," he said. "If it's not, we object."

Subsidised fuel is a sensitive issue in Southeast Asia's biggest economy, but the government has sought to soften the blow through compensation measures for 20 million households, including direct cash transfers. The price increase is expected to push up inflation.

Authorities said 24.17 trillion rupiah ($1.62 billion) in additional welfare programmes would go to those needing them, while hotlines would be set up to hear complaints.

"These are very difficult conditions, but if you look at the assistance provided by the government, it is quite large," Minister of Social Affairs Tri Rismaharini told a news conference.

"We hope this could help cushion the rise in prices that the people are facing."

Ahmad Choirul Furqon, an official at the Traditional Market Traders Association, said the fuel price increase would have a domino effect in pushing up other costs and urged the government to rethink its support measures.

"We hope the government does not use populist policies as a solution," he said.