Indonesia scraps controversial gasoline subsidy

JAKARTA, Dec 31 (AFP): Indonesia's government will scrap its gasoline subsidy from January 1 to free up more funds to boost the slowing economy, a senior minister said Wednesday.
The prices of gasoline and diesel in Southeast Asia's biggest economy will float following the market price and will be reviewed monthly, Chief Economic Minister Sofyan Djalil said.
Djalil said he hoped the move would help accustom Indonesians to price fluctuations after decades of being insulated by hefty fuel subsidies.
In January, the price of gasoline will fall in line with declining global oil prices to 7,600 rupiah (61 cents) a litre, from 8,500 rupiah. Diesel will also be lowered to 7,250 rupiah, from 7,500 rupiah a litre.
The government also fixed its diesel subsidy at 1,000 rupiah a litre for 2015.
"Diesel fuel is still subsidised because it is used for economic activities and the government deems it necessary to subsidise it," Djalil told reporters.