Indonesia Advisory

The government will again cut the prices of subsidized Premium gasoline and diesel fuel starting Monday, President Susilo Bambang Yudhoyono announced Sunday.

"Considering inflation, we have to set the right fuel price. I have decided to cut the prices of Premium and diesel fuel," the President was quoted by Antara news agency as saying.

The price of subsidized Premium gasoline has been cut by Rp 500 to Rp 5,000 (45 US cents) per liter, and the price of diesel fuel has been cut by Rp 700 to Rp 4,800 rupiah per liter.

The decision to cut fuel prices was taken after a limited Cabinet meeting chaired by the President and attended by Vice President Jusuf Kalla and economic ministers.

Finance Minister Sri Mulyani said the decision to cut fuel prices took into consideration the falling price of crude oil on the international market.

"With this fuel price cut, we hope there will be a reduction in inflation by 0.3 to 0.5 percent, so that it should help maintain people's purchasing power," she said.