Indonesia’s finance minister Sri Mulyani Indrawati said the country will reallocate 24.17 trillion rupiah ($1.6 billion), or nearly 5% of its fuel subsidy budget, to social spending, which includes cash distributions to 20.65 million households Reuters.

The move follows reports that the government is considering raising subsidized fuel prices to counter rising fiscal pressures fueled by high global energy prices, sources said.

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What happened: Indonesia’s original energy subsidy budget for 2022 was 502 trillion rupiah, which has already been tripled. If fuel prices are not increased, the country’s authorities believe more funding would be needed.

FM’s tacte: Finance Minister Indrawati stated that the spending reallocation is due to take effect this week and was co-decided after discussions on fuel subsidy policy President Joko Widodo. “People will receive welfare to increase their purchasing power,” Sri Mulyani told an online press conference, according to Reuters.

Fuel price increase: The finance minister reportedly gave no details on the government’s plans for fuel price hikes. Last week lawmakers from Parliament’s Energy Committee told Reuters the government could hike fuel prices by 30% to 40%. Such a move will increase the inflation rate by 1.9 percentage points by 2022, they said.