Economists say the country's central bank may need to lift its key policy rate again this year to counter inflationary pressures if the government curbs the use of subsidized fuel.

Evita Legowo, a director at the energy ministry, said the government has yet to discuss the issue with the country's Parliament, which will have the final say and pushed for a delay to an earlier plan to curb fuel subsidies this year.

"At the moment, our colleagues at the House's budgeting committee prefer that private vehicles not use subsidized fuels anymore," Legowo told reporters, adding that the government wanted to impose the measure after the festive season.

Jakarta indefinitely delayed a plan to wean private cars off cheap gasoline from the second quarter, as it aims to keep a budget deficit at no more than 2.1 percent of GDP and as rising oil prices pushed up inflation.

Indonesian central bank Deputy Gov. Hartadi A. Sarwono said on Thursday that inflation could pick up to 5.7 percent at the end of the year if the government limited the use of subsidized fuel.

This would still be within Bank Indonesia's end-year target of 4-6 percent, but higher than an expectation of inflation easing to 4.9 percent by the year-end without any measures on fuel, Sarwono said.

June inflation slowed to a 12-month low of 5.54 percent, and Bank Indonesia said on Tuesday it expected price pressures ahead to be under control, after keeping its policy rate on hold at 6.75 percent for the fifth month.

Economists expect inflation to pick up even without fuel subsidy curbs during the Eid Al-Fitr festivities, which marks the end of the Ramadan fasting month in the world's most populous Muslim nation, as spending rises on food and travel.

Limiting the use of subsidized fuel, which costs just half of the market gasoline rate for the growing flood of cars on Indonesia's streets, could reduce fuel use and curb costly imports by state energy firm Pertamina from regional oil markets. Indonesia is Asia's largest gasoline importer.

Finance Minister Agus Martowardojo in February cautioned that if the plan to limit fuel subsidies was delayed to next year, it would add up to 6 trillion rupiah ($703 million) to the state budget.