Indonesian trade unions are threatening to hold nationwide protests after the government decided to go ahead with fuel price increases next month. A similar move in 1998 triggered a nationwide wave of rioting which ended President Suharto's 32-year dictatorship.

The president of the Indonesian National Front for Labour Struggle (FNPBI), Dita Sari, told the September 6 South China Morning Post that unions were determined to resist the price rises.

“We have already come to an agreement with the other trade unions that we are going to try to have a mass demonstration on October 1”, she said. “We plan to make it national but we will see the conditions. If we can make it national it will be better.”

The government has confirmed that oil and gas prices will rise by an average 12%, as mandated by the International Monetary Fund (IMF) under its US$5 billion loan package to Jakarta.

Dita Sari also accused the government's new economics chief, Rizal Ramli, of using the issue to prove himself to the IMF following his appointment in last month's cabinet reshuffle. She doubted the government would back down this time but said the move would damage President Abdurrahman Wahid's credibility.

“This is the kind of price that he has to pay”, she said. “This kind of decision will have a very deep impact on the economy of the people.”

Earlier this year, Wahid cancelled a plan to raise oil prices after mass protests broke out. Next month's price rises come on top of increases in economy-class public transport fares and electricity. They are to be followed by a new round of oil price increases next year. The government has agreed to a special relief scheme to relieve the burden on the poorest households.

BY JAMES BALOWSKI

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