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Indonesia says considering removing government subsidies for gasoline next year

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Indonesia's Chief Economics Minister Sofyan Djalil on Thursday said the government is considering removing subsidies for gasoline next year, but would maintain subsidies for diesel.

[JAKARTA] Indonesia's Chief Economics Minister Sofyan Djalil on Thursday said the government is considering removing subsidies for gasoline next year, but would maintain subsidies for diesel.

"The option is fixing subsidy (per litre) for diesel, then we will uncouple gasoline, make gasoline a non-subsidised fuel," Mr Djalil told reporters.

He said the policy wouldn't need parliament's approval.

Indonesia allocated 246.5 trillion rupiah (US$19.63 billion) for fuel subsidies in its 2014 budget. The 2015 budget presented in September, one month before Joko Widodo became Indonesia's president, set a budget of 276 trillion rupiah.

In mid-November, Mr Joko hiked fuel prices by more than 30 per cent, which the finance ministry said would reduce spending on subsidies in 2015 by half.

REUTERS