Standard Oil Price Remains
Friday, 10 November, 2006 | 16:45 WIB

Tempo Interactive, Jakarta: The government will not alter the fuel oil and subsidized fuel oil prices until the second half of 2007. “For now until June 2007, we will use the same standard,” said Finance Minister Sri Mulyani in Jakarta yesterday (9/11).

She said that the government and the House of Representatives (DPR) will discuss the oil price standard again if there is a change of the petroleum price abroad. “If there is a difference, it will be calculated in the Revised State Budget 2007,” she said. In the Revised State Budget 2006, the oil price is set at US$64 per barrel and in the State Budget 2007 at US$63 per barrel.

In the last few months, the standard oil price in Singapore (Mid Oil Platt’s Singapore) has been lower in line with the trend of world’s oil price decrease to the level below US$58 per barrel. The oil price in Singapore is equal to the fuel oil’s economic price. For example, ‘premium’ price on the international market is Rp4,100 per liter. Adding 15 percent tax, the sale price becomes Rp4,740 per liter, still a little higher than the price of subsidized ‘premium’ price at Rp4,500 per liter.

In line with the trend of the world’s oil price decrease, last week Energy and Mineral Resources Minister Purnomo Yusgiantoro said the government plans to lower the subsidized fuel oil price next year. The Energy Department has prepared the mechanism of the subsidized fuel price decrease.

Sri explained the adjustment of the subsidized l oil price is regulated in Presidential Regulation No. 55/2005. “Whether the ( oil) price will be revised, we’ll see because that depends on several matters,” she said. According to the Presidential Regulation, the domestic retail oil price can go up or down, depending on economics. The domestic fuel oil price refers to the standard oil price in Singapore.

However, she acknowledged that the trend of the world’s oil price tends to decrease and this benefits the government. The world’s oil price decrease will cause the realization of the fourth quarter of 2006 subsidies to be lower. “This means the government only remains to count the total number of claims to be paid to Pertamina,” she said.

Agus Supriyanto
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