Jakarta, Dec 15 (Antara) - The Indonesian crude price (ICP) slid down in the world market as global oil prices continued to fall over the past several months.
Since the falling oil prices and the ICP sliding in the world market are factors that affect the domestic fuel prices in the country, the government is considering lowering the fuel oil price at home.
Actually, the fall in domestic oil price will be good and positive for the country's economy.
"We hope the fuel oil prices will go down in January. If these are lowered, the country's economy will improve," Gusti Nyoman Wiratmadja Puja, the director general of natural oil and gas of the Ministry of Energy and Mineral Resources, said after attending "Pertamina Refining Day 2015" function on Tuesday (Dec 15).
He said with the fall in the world oil prices, the government will lower the price of fuel oil in the country next month.
The team of the Energy and Mineral Resources Ministry (ESDM) has recorded that the average Indonesian crude price or the ICP in November 2015 fell by US$2.24 per barrel, compared to the October level.
According to the ESDM statement made available to Antara last week, the Indonesian crude price in the world slid from US$43.68 per barrel in October to US$41.44 per barrel in November 2015.
The ESDM oil price team disclosed that the ICP's fall was, among other factors, caused by the publication of the International Energy Agency (IEA) report which mentioned that the commercial crude stock of countries grouped in the Organization for Economic Cooperation and Development (OECD) increased by 13.8 million barrels.
Besides that, based on the report of the Energy Information Administration (EIA), the US crude production, as reviewed in October, increased by about 57 thousand barrels per day to be pegged at 9.173 million barrels per day in November.
As was reported earlier, the world oil prices tumbled to a multi-year low on Tuesday (Wednesday morning in Indonesia) Dec 12 after the Organization of Petroleum Exporting Countries (OPEC) session in Vienna recently failed to take any significant decision. Thus, the world oil market continued to be burdened.
The OPEC held its 168th Session in Vienna, Austria on November 4, 2015. Indonesia participated in the session, marking the official reactivation of its membership in the world oil cartel.
Indonesia became an OPEC member in 1962 but pulled out of the world oil organization in 2008 since it was unable to meet its production quota and became an oil importer country. It rejoined the OPEC not because it wants to become an oil exporter but because it is interested in expanding its global network.
"Now, Indonesia is in the transition process which is dominated by a shift from fossil energy to new and renewable energy that is sustainable in the future," Indonesia's Governor for OPEC Widhyawan Prawiraatmadja said.
However, the OPEC session reportedly failed to formulate a policy that could help lift the world oil prices. Crude prices in the world market, including the Indonesian crude prices, continue to fall.
The fall in the world oil prices has led the Indonesian government to consider lowering its fuel oil prices at home.
Therefore, the government, according to Director General Gusti Nyoman Wiratmadja Puja, will lower fuel oil prices at home next month (January), a step which is expected to create conditions conducive for the country's economic development.
"We hope the fuel oil prices will go down in January. If these are lowered, the country's economy will improve," Wiratmaja said after attending "Pertamina Refining Day 2015" function here on Tuesday.
He did not mention the extent to which fuel oil prices could be lowered, and merely said that after calculating the fall in global oil prices, there was a possibility of slashing oil prices at home.
"Specifics about the exact reduction in these prices will be announced by the Energy and Mineral Resources Minister. What is sure is that it will be based on calculations (keeping in view global prices) and existing parameters," noted the director general.
In the meantime, President Director of the state-owned oil and gas firm PT Pertamina Dwi Soetjipto said the latest prices will be decided after studying the world crude price this month.
"No doubt that the world oil prices are going down but then it is happening at a time when the US dollar is also strengthening against the rupiah. So, the oil prices at home could not be lowered (automatically)," Dwi said after the Pertamina Refining Day 2015 function.
He explained that although Pertamina did gain as a result of the fall in the world oil prices, yet it was no guarantee of Pertamina's profit also increasing.
"The government policy is a three-month policy, while the oil prices have been declining for only a month. So, if we calculate prices over a period of three months, the result would possibly show that these remained at par, resulting in neither losses nor profits," the Pertamina president director said.
However, he said the new fuel oil prices will be announced at the end of this month.
As it was reported earlier, the world oil prices tumbled to a multi-year low on Tuesday (Wednesday morning in Indonesia) Dec 12 after the Organization of Petroleum Exporting Countries (OPEC) session in Vienna recently failed to take any significant decision. Thus, the world oil market continued to be burdened.
The United States oil reference of light sweet or West Texas Intermediate (WTI) for January deliveries fell by 14 cents to end at US$37.51 per barrel at the New York Mercantile Exchange.
Brent North Sea crude for January dispatches was down 47 cent to stay at US$40.26 per barrel in the London trade.***3*** (A014/INE/B003)DITED BY INE
(T.A014/A/BESSR/Bustanuddin) 15-12-2015 22:49:4 |
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