JAKARTA, Jan 12: Indonesia will slash the price of subsidised fuel from January 15 to boost the buying power of Indonesians, President Susilo Bambang Yudhoyono said on Monday.

The price of premium petrol will be cut from 5,000 rupiah (45 cents) a litre to 4,500, and diesel will be reduced from 4,800 rupiah a litre to 4,500.

“We have decided to cut prices of certain goods controlled by the government such as premium gasoline, diesel... the prices must be right so the community can afford them. This is about boosting their buying power,” Yudhoyono said, following a meeting with economic ministers.

“Some feel that the government sets prices for everything, it is not like that. We regulate the prices of some goods only, those that meet the needs of most,” he added.

Besides fuel, prices of electricity, cooking oil, milk and medication have also been cut.

“The reduction in prices of goods such as fuel means there will be a significant drop in inflation rate,” Finance Minister Sri Mulyani Indrawati said.—AFP