JAKARTA - INDONESIA may consider cutting subsidised fuel prices following the steep drop in global crude oil prices, the energy minister said on Monday, a move likely to raise subsidy costs and rattle the country's financial markets.

Indonesia has some of the lowest fuel prices in Asia as the government spends billions of dollars a year on subsidies.

President Susilo Bambang Yudhoyono's decision to raise fuel prices in May in a bid to cut the government's soaring subsidy bill proved immensely unpopular. Now, as oil prices tumble, he is under pressure from a wide array of political parties to ease the burden of higher energy prices for the poor.

'I will bring the issue to cabinet because this is a political decision,' Mines and Energy Minister Purnomo Yusgiantoro told reporters on Monday, following a request by a parliamentary commission to cut subsidised fuel prices.

'I have explained to the parliamentary commission about the picture of subsidised fuel. They asked for a price cut and I can't decide by myself,' he added.

Indonesia raised fuel prices by an average of nearly 30 per cent in May.

The government has used an average price of US$95 (S$143.39) a barrel in its budget for 2008, but while global oil prices have fallen recently, the average price for 2008 is still above this level which means there isn't room to cut, said a senior official at the mines and energy ministry who declined to be quoted by name.

Oil prices have tumbled from a record US$147 a barrel in July to below US$64 a barrel on Monday.

The rise in non-subsidised fuel prices has prompted some Indonesian consumers to switch to cheaper, subsidised fuel, increasing consumption of subsidised gasoline and diesel oil, Mr Yusgiantoro said.

State energy group Pertamina sells most products in the retail market at highly subsidised prices, but two types of high-octane gasoline known as 'Pertamax' and 'Pertamax Plus' and fuel sold to industry are not subsidised by the government.

Indonesian demand is particularly important in the Asian market, since it is the region's biggest importer of gasoline and diesel.

Pertamina has nine refineries scattered around the archipelago with a combined capacity of around 1 million bpd.

But it only supplies 70 per cent of domestic oil consumption, while the remaining 30 per cent is met through imports.