Indonesia's government plans to transfer more than $US1.5 billion in cash to the poor, to offset the impact of rising fuel prices.

The welfare minister, Aburizal Bakrie, says the cash will be distributed to 76.4 million needy people, in the form of monthly payments to individual households.

President Susilo Bambang Yudhoyono says an increase in the cost of fuel, which could be as high as 30 per cent, is necessary to reduce the cost of Indonesia's fuel subsidy scheme, which outstrips spending on social programs and infrastructure.

The government is facing mounting opposition from ordinary people and in parliament, where most parties have reportedly turned against the plan to win favour with voters ahead of elections next year.

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