Kalla is Not Afraid About the Jump in Price of World Oil
Monday, 24 March, 2008 | 13:39 WIB

TEMPO Interactive, Bandung: Vice President Jusuf Kalla said Indonesia would not collapse or go bankrupt from the jump in the oil price that reached US$ 111 per barrel. “The government will continue balancing the rise in the price by reducing the subsidy,” he said at the opening event Tepang Saudagar Tatar Sunda at the meeting hall of Bank Indonesia in Bandung yesterday.

According to Kalla, Indonesia at the present time does not import crude oil, and still is regarded as a country that exports oil, and is a member of the Organization of Petroleum Exporting Countries(OPEC). With the exporter status, the state budget is not really hit by the jump in the oil price. “We (the government) still can earn a profit from the increase of the oil price,” he said. Indonesia, he continued, is different from its neighbors countries like Thailand and the Philippines that have begun to be burdened by the jump in world crude .

The world's oil price is more than US$ 100 per barrel. Last March, it even reached US$ 111.8 per barrel. However, it went down last Thursday to below US$ 100 per barrel as a result of the global recession that has reduced demand for the world energy. In New York the main market, light crude oil for May was closed at US$ 99.20 per barrel. “The oil price went down below US$ 100 per barrel due to U.S. anticipation for a recession that could impact the entire world,” said analyst Sucden Michael Davies, was reported by AFP.

Vice President Jusuf Kalla criticized the sides which say Indonesia is in a food crisis. He said the increase of the food price such as for cooking oil and flour is not a parameter for a food crisis, because the price for basic commodities like rice and sugar are not increased. “Cooking oil and flour are secondary commodities. Its influence on the gross domestic product (PDB) is very small,” said Kalla. At the present, Indonesia is a middle developing country with a per capita income of US$ 2,000.

Regarding the jump in the world oil price, last week the government and parliament (DPR) agreed to increase the oil price assumption in the 2008 state budget from US$ 83 per barrel to US$ 95 per barrel. “We intend to exercise US$ 95 per barrel,” said Finance Minister Sri Mulyani Indrawati, in Jakarta, last week.

Sri Mulyani also said that the government has been anticipating the phenomenon of the world oil price by creating a kind of scenario toward the oil price assumption in a revised state budget. “There's been scenarios if the oil price reaches more than US$ 100 per barrel or even above US$ 105 per barrel in the entire year,” she said.

Anton Aprianto | Gunanto