KONTAN.CO.ID - JAKARTA. Indonesia's cabinet will present policy options for fuel prices to President Joko Widodo in the next two days, its chief economic minister said on Wednesday, amid rising expectations of a price hike to rein in a ballooning energy subsidy budget.

Jokowi, as the president is popularly known, has been considering raising prices amid high global energy prices and a depreciating rupiah currency.

A senior cabinet minister has previously said the president might announce a price hike this week.

"We're still evaluating within this one to two days," Coordinating Minister of Economic Affairs Airlangga Hartarto told a news conference, responding to a question about fuel price policy.

"We will report to the president this week," he added.

Baca Juga: Oil Jumps Almost 3% as Tight Supply Moves Back Into Focus

Financial markets are closely monitoring Jokowi's decision because it would affect inflation and the pace of the central bank's monetary tightening.

Bank Indonesia (BI) hiked interest rates for the first time since 2018 on Tuesday, in a move some analysts said was in anticipation of a fuel price hike.

The government has tripled its subsidy budget to 502 trillion rupiah ($33.82 billion) to keep prices of some subsidised fuels, power tariffs and liquefied petroleum gas unchanged.

Finance Minister Sri Mulyani Indrawati on Tuesday said without fuel price adjustments, this year's energy subsidy bills could rise by a further 196 trillion rupiah ($13.21 billion), according to media reports.

Separately, Sugeng Suparwoto, who heads parliament's energy committee, said on Wednesday some subsidies should be retained for fuel prices and suggested an increase of around 30% for gasoline prices.

"We must subsidise for the people, but how much? This is what we're trying to tweak in such a way so that people's purchasing power is not disturbed, the state budget is not bleeding and state firms remain healthy," Sugeng said.

Editor: Anna Suci Perwitasari