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Jakarta (ANTARA News) - The government is still studying the Indonesian Chamber of Commerce and Industry (Kadin)`s proposal to President Susilo Bambang Yudhoyono for an increase in the prices of subsidized fuel oil, a minister said.

"The issue of fuel oil price hike will eventually be decided politically. To take the decision is not easy," Minister of Energy and Mineral Resources Purnomo Yusgiantoro said when opening a seminar on crude price hike here on Wednesday.

President Yudhoyono himself had hinted that raising the prices of subsidized fuel oil was the last option, the minister said.

But he added the government would likely study the proposal as part of efforts to address skyrocketing fuel subsidy due to the surging global crude prices.

The global crude prices which are hovering above US$115 a barrel are expected to push up fuel subsidy to more than Rp125 trillion.

Actually, the government had had a number of parameters with regard to its fuel oil policy, including a plan to reduce fuel subsidy, the minister said.

Speaking to the press following a meeting with President Yudhoyono on Tuesday night, Kadin Chief MS Hidayat proposed that the government raise the prices of subsidized fuel oil in response to the global crude price spiral which put pressures on the state budget.

"We propose if the current global crude price spiral cannot be controled, the fuel prices be raised by a range of 10 to 30 percent," Hidayat said.

The president responded to the proposal with caution and hinted that raising fuel prices was the last option after analyzing the impact of fuel price hike, he said.

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