Indonesia's government on Friday night raised key fuel prices by a higher-than-expected average of 126 per cent and announced a plan to bring prices in line with the global market in moves likely to test the patience of its people for tough reforms.

President Susilo Bambang Yudhoyono's decision to slash fuel subsidies and more than double prices just days before the Islamic holy month of Ramadan marks one of the most daring economic reforms launched by a leader in Jakarta since the 1998 fall of strongman Suharto.