Tuesday, 3 July 2012


Solution was needed to minimize the potential of increased national budget as result of increased world’s oil price and one the thinkable solution was to launch a National Movement, i.e. the National Austerity Movement for Subsidized Oil Consumption. 

It was reasonable that the Government had to set a Regulation with hard sanction to support the National Movement for Subsidized Oil Consumption. Naturally the consumption of oil as economic commodity, particularly the non-renewable type of energy was based on the principle of efficiency.

This dogma was applicable worldwide in any country at all. Globally, total oil consumption was more than 85 million barrel or roughly 31.6 billion barrels pattern the world would run out of oil reserves in 41 years.

The world’s biggest oil consumer countries were: the USA 35.3% (19.5 million barrels), followed by Russia 37% (2.9 million barrels), China 19% (7.8 million barrels) and India 23.7% (2.9 million barrels). The transportation mode constituted 66% of world’s oil consumption. In the USA 8,8 out of every 10 people used cars for daily transportation.

Indonesia’s natural oil reserves was estimated at 4 billion barrels with annual production of less than 1 million barrels, so Indonesia’s oil reserves would only last for 15 years yet Indonesia’s oil consumption was extremely high, draining of natural oil reserves was happening at the speed of eight times that of the world’s biggest oil producers.

Indonesia’s reserve-to-production ratio was around 4 which was way below Saudi Arabia whose reserve to production ratio was 35 yet their natural oil reserves was still 265 billion barrels. Other comparative was Lybia whose r-to-p ratio was around 30.

Extravagance in consumption of subsidized oil could not be loosely allowed because it would speed up draining process of oil reserves. Data had it that 77% of subsidized oil was benefited by the rich, who mark well probably owned more than one unit of car. The low strata people probably constituted 15% of subsidized oil users, while those who traveled by bus did not enjoy the subsidy which amounted Rp 137 trillion. Meaning those who benefited from the oil subsidy were the upper class people, not the common people.

Considering how hard it was to increase price of subsidized oil, on May 29, 2012 last President Susilo Bambang Yudhoyono proclaimed launching of the Austerity Movement of Using Subsidized Oil as well as water and electricity through five steps.

Naturally all parties must support the austerity movement to consider that use of energy in the future unless based on effective planning and proper implementation would create big problem. The only thing was, it was a pity that the movement was only some sort of plead which, based on experience, never brought tangible result.

The case was different from that in developed countries where their awareness about the institution including unwritten rules (norms, customs, external persuasions) or formal regulations were practiced. Evidently when President SBY pled the people not to commit any practices of corruption, collusion and nepotism where the President himself took the lead in the antigraft campaign – they all had not shown any tangible result.

So it was advisable that the Government made formal regulation with strict sanction, to support the Austerity Movement. It could be in the form of Government Regulation as Substitute to Law (perpu) at central (Jakarta) level and Governor’s Regulation at the Regional (local) level; not just a circular letter but an obligatory rule for example in regard to use of Government official car by Government Institutions.

Saving of fuel expenses on official car was just like moving money from the left pocket to the right pocket, but supposedly high ranking officials using official cars be exemplary in their actions. This was the most important thing to be exercised, that they might pose as an example for the people.

In reality high ranking officials who had the good intention to use their official cars only for formal duties were derided by friends and neighbors as some one being stupid not to make the best of the once in a lifetime opportunity. So the public could only wait for the fruits of this national austerity movement. In fact if there was only harmony between the regulation and exemplary act of the leaders, the austerity movement should show its fruits.

When the exemplary act of state officials could be seen by the public, and sincerely not an act of image building, the public would follow their steps. Never under estimate extravagance in consumption of subsidized oil by the low class people who did not or could not afford to buy cars. Even by using motorcycles they could increase consumption of subsidized oil for something not really necessary.

In the outskirts of Jakarta or other towns, it was clearly visible how motorcycles were used as hedonic lifestyle. To ride a motorcycle for an used as hedonic lifestyle. To ride a motorcycle for an unproductive trip (not related to economic activities) had become habitual. To take children on a joy ride, or just sightseeing along the streets were done on a motorcycle and all had to use subsidized oil.

With tens of millions of motorcycles, even thought not used for leisure, consumption of subsidized oil would be increased not deliberately yet abundantly. With the convenience offered by the motorcycle, now people were reluctant to travel on foot or by bicycle for may purposes.

Urban people were doing less physical activities. Morning jogging or afternoon walk, much easier by motorcycle. The result was that people of the lower strata were getting less vigorous and prone to sickness.

Now poor health like cholesterol, heart disease and stroke, were no longer the diseases of the rich. The common people were also suffering from these diseases since they were to lazy to move and prefer to go by motorcycles instead. Now was the right momentum to run this austerity movement for subsidized oil before it was too late. 

Business News - June 22, 2012    

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