JAKARTA: Indonesia confirmed yesterday plans to raise fuel prices by up to 30pc, a move expected to spark more protests in a country where millions of people live on less than $2 a day.

But analysts said a cash handout scheme, announced as part of the fuel hike and aimed at protecting the country's poor, would help cushion the blow of the price increase.

"Exactly by how much has yet to be decided, but it's as you have heard by a maximum 30pc," Information Minister Muhammad Nuh Nuh said.

"When? I can't say it could be tomorrow or a day after tomorrow," he added.

Indonesia, which has some of the lowest fuel prices in Asia, provides heavy subsidies for fuel but soaring energy and food prices have battered the budget and pushed the government to act.

With crude prices hitting around $124 a barrel, compared with the government's budget estimate for an average oil price of $95 a barrel, fuel and energy subsidy spending is expected to top $20 billion, a fifth of total government spending.