JAKARTA ~ President Susilo Bambang Yudhoyono has said the government will not hike fuel and electricity prices next year in order to keep a lid on inflation.

“We do not want to take risks on inflation. We also are taking into consideration the (issue of) people’s purchasing power,” he said during a visit to the head office of state electricity company PT Perusahaan Listrik Negara (PLN).

Without any tariff hike, the government would continue to subsidize both PLN and fuel firm PT Pertamina to sell power and fuel below their commercial prices.

“The government takes the option to pay a subsidy though it must be manageable,” the president said.

The government still subsidizes the price of fuel for transportation and household consumption.

Prices were last hiked by an average of 126 percent in October last year, prompting a sharp upward spike in average annual inflation in 2005 to 17.11 percent.

For next year, the government has allocated fuel subsidies of up to Rp68.6 trillion (US$756 million) and power subsidies of Rp25.8 trillion ($284 million).