As oil price finally passes US$120 per barrel, the Indonesian government has finally decided that it will cut the oil subsidy and let the domestic oil price increase to some extent in June.
Well, well, this is a dilemma. The president is accused of trying to maintain his popularity for the 2009 presidential election by maintaining the current oil price; however it is true many poor people here will be suffering from the rising price, which will inevitably prompt the prices of other goods in the market.
The World Bank reported in 2006 that 40 percent of Indonesia's 230 million population lived with less than $2 per day...pathetic, isn't it?
Now if the oil price increases, people will have to spend more on transport expenses. So will the industry, which will surely have to also pay more for many of their industrial processes.
These will increase prices of many goods, including those not directly affected by the rising oil price (such as apartment monthly fees, etc).
Inflation occurs.
Who will suffer most? At least that 40 percent of the population for certain.
Now those high officials and business people, who won't be much affected with the soaring oil price, are not of course concerned much with this.
What's on their minds is how to maintain good business climate, which is important for their businesses.
If the government continues subsidizing the oil price, they argues, it will have to allocate up to Rp 250 trillion (approximately $27 billion) for oil subsidy only, while our 2008 state budget amounts to only some Rp 987.48 trillion. Rp 250 billion is more than a quarter of the total state budget!
Well, that makes sense, of course. That's why Mr. President Susilo Bambang Yudhoyono finally gave up and announced Monday that it would increase the oil price by June.
My question is...why do us Indonesians have to also suffer from the skyrocketing global oil prices, if we are exporter of oil?
I mean, c'mon...we're the member of the OPEC (the ORganization of Petroleum Exporting Countries).
The president said Monday that Indonesia is considering to resign from the OPEC because we are no longer an oil exporter.
However, I'm sure --though having no exact data-- that Indonesia produces a quite large number of oil and has to only import a little portion of our total national oil consumption.
So it means that we have to pay more only for the portion of oil we're importing, right?
Well, well, well...where the problem is I don't know.
I once heard that in fact we're exporting crude oil and importing the processed one. If that is so, than that sounds even more foolish. Don't we have those so remarkable petroleum engineers that some oil-reach Mid-East countries are trying to attract these people to work at their places with promised excellent payment?
Some say it's because of mushrooming corruptions.
Perhaps it is.
Whatever, the poor people can't avoid more sufferings as the oil price will surely increase next month.
