2nd July 2008. Jakarta (ANTARA News) - President Susilo Bambang Yudhono expressed deep concern about the continuing surge in the world oil price, saying it might well reach US$200 per barrel. However, the government could not increase the fuel oil prices at home again and again due to the skyrocketing world crude oil price, the president told newsmen in Palembang, South Sumatra, on Wednesday.
"The world crude oil price could well reach US$160 to US$200 per barrel," the head of state said. The president said the government recently increased domestic fuel oil prices by an average of 28.7 percent as it had estimated the world crude oil price would reach US$110-US$120 per barrel. He said if the world oil price rose to US$140-US$145, the fuel oil subsidy would reach Rp205 trillion, not to mention the subsidy for electricity which would increase by Rp80 trillion to Rp300 trillion.
When the world crude oil price approached US$150 per barrel, the fuel oil subsidy would reach Rp230 trillion in addition to Rp80 trillion for the electricity subsidy. "If the oil price increases further to US$160, the fuel oil subsidy will rise to about Rp259 trillion plus the Rp80 trillion increase in the electricity subsidy, the president said. On the impact of the world crude oil price hike on the state budget, the president said, it would be "very unhealthy" if the subsidy for fuel oil and electricity reached Rp300 trillion.
The head of state, therefore, called on all the people, including government officials and members of state institutions, to continue economizing on the use of fossil-based energy sources so that fuel oil consumption and fuel oil subsidy could drop. The head of state said the soaring of the world crude oil price to US$150 per barrel was an alarming sign. Therefore, he said, when attending the G-8 summit in Hokkaido, Japan, within the next few days, he would call on the meeting to also discuss the world oil price crisis without blaming each other.
Yudhoyono said the summmit discussions on the world oil price issue should not only involve OPEC member countries but other parties such Russia and multinational companies as well. The parties in the discussions should consider whether or not world oil production could be increased, and if it could not, then oil consumption should be reduced. The president also called on experts to continue research activities on alternative energy sources like biofuel. (*)
