Indonesian Gas Price: Decreasing is Also a Dillemma

Today is 1 day before the D-Day….hey, what are we talkin’ about?

I’s about a signal of gas price cut by the government, Vice President Jusuf Kalla gave the signal about that. He stated that at 15^th of January the gas price would be cut down again.

At the end of 2008, Indonesia has made some policy to cut the gas price, from Rp 6,000 at May, reduced to Rp 5,500 at 1^st of December, then about two weeks later, the government cut down the price again to Rp 5,000.

People would be glad with the reduction, but when there is a glad, there is a sad, who are the unhappy ones? They are gas station owners. They think it’s all too sudden, since they still have the old stock and they should follow the government policy to sell with lower price. Some of them even had lost about ten millions rupiahs because of the reduction.

Incongruity of LPG’s Pricing by Pertamina

Firstly, I’d say congratulation to madam Sri Mulyani Indrawati as her achievement to be 23rd most influential woman in the world from Forbes Magazine version. Wish it can give positive externalities to Indonesian economic growth in the future.

Yesterday, I got an invitation to attend live talk-show broadcasted by Astro Awani, titled ‘Mengukur Kinerja Presiden (Measuring President’s Performance)’. That program was attended by Minister of Energy and Mineral Resources Mr Purnomo Yusgiantoro supported by President’s Spokesperson Mr Andi Mallarangeng, and two panelists, Mr Anis Baswedan (Paramadina University Chancellor) and LPEM FEUI economist Mrs Hendri Saparini. It discusses about national oil subsidy and other alternative energy. The discussion consist of five segments. The most interesting segment for me is the fourth namely the raising of LPG’s price.

Let’s Talk About The Oil Price in Indonesia

Yesterday, my friend showed me about the Kwik Kian Gie’s article about his counter statement against the increasing of fuel price in Indonesia, last June. The same things has been shown by Professor Kwik in Aula Setyaningrum, University of Indonesia 4 years ago. I don’t know, is Mr Kwik speaking up as an economist or politician. The Mr Kwik’s article can be read in here. He said that we still have profit although the world oil price has been raised since we have our own oil reserve and it can be sold with low price (moreover, it can be free). We just have to spend the production costs to make the raw oil materials into finished good like premium, pertamax, etc. Instead of sold to another countries, the oil should  be retained to fulfill our needs. So, the government still can subsidize the civilians. It looks like a good idea, right? But for me, Mr Kwik opinion doesn’t make sense.