Jakarta raises fuel prices despite protest Long lines snaked around petrol stations as Indonesia announced a fuel price increase of up to 44%. INDONESIA has announced a fuel price increase of up to 44 per cent, reducing the costly subsidies that have kept pump prices in South-East Asia's largest economy among the world's lowest. Long lines of motorbikes and cars snaked around petrol stations as motorists waited to fill up their tanks with cheaper petrol before the increase took effect on Saturday morning. The subsidies are a significant drain on the country's budget. The budget approved on Monday sets the 2013 fuel subsidy at $A22.03 billion - nearly four per cent of total economic output. By comparison, the government aims to spend $A21.81 billion on infrastructure in 2013. The new budget also has more than $A980 million in cash handouts to cushion the impact of the fuel price increase on 15.5 million poor families over four months. President Susilo Bambang Yudhoyono asked MPs to approve a plan that would ensure the country's poorest people were not left unprotected. "The prices are applicable simultaneously across Indonesia," Mines and Energy Minister Jero Wacik said in announcing the increase. The increase - the first in five years - will raise the price of petrol from about 45 US cents to 65 US cents per litre and diesel fuel from 45 US cents to 55 US cents. Coordinating Economic Minister Hatta Rajasa said the hike was actually an adjustment as the country has to spend nearly $A32 billion on fuel imports, while about 70 per cent of subsidies were merely enjoyed by middle and high classes. "This is a very difficult choice and the last alternative to be taken by the government," Rajasa said before the announcement. Thousands of students and workers took to the streets across the country protesting the plan to sharply raise fuel prices. Some held protests on Friday night in the capital Jakarta and some other cities. Policemen were deployed to guard fuel stations across the country, where cars and motorbikes lined up on Friday evening to buy fuel under the old prices. The government has ordered all stations to be open around the clock. The government has subsidised fuel for decades in Indonesia, where about half of the 240 million people survive on $A2 a day.