Tuesday, 9 July 2013


Each time there was plan to increase oil price, there was bound to be outburst, uproars, turmoils and polemics and even threatening demonstrations; not to mention political maneuvers whether supportive or rejection to the plan.
Basically increase of price subsidized oil could not be refused if the government wished to keep state’s budget from swelling due to oil subsidy which increase time after time. Somehow to increase oil price remained to be unpopular among the people. Moreover the timing was regarded as inappropriate as it coincided with student’s holiday season and Idul Fitri festivity when price tend so soar high with or without oil price increase.
What the government must ponder was that the need for energy from oil fuel would increase time after time. The case of oil subsidy was in fact only a small portion of energy issues as whole since basically the world’s oil reserves was thinning out.
It was most disheartening if all the uproars never made the government realize the urgency of exploring alternative energy resources. The effort to seek for alternative energy was always edged aside by political turmoils, i.e. politicizing the oil fuel issue for mere short term interest.
Supposedly when this nation was busily debating to increase price of subsidized oil, all should be remained that the issue of alternative energy was an urgent need, at least in the form of regulation. The government already had Presidential Regulation no. 5 /2006 on National Energy Policy. So all it takes was to follow up the policy with regulations on alternative energy as breakdown of the Presidential Regulation.
But why is it that the government and all the related parties seemed reluctant to finalize the regulation? It was reckoned that there was hidden motivation to seek for higher returns in prioritizing the kind of energy. Investors tend to develop fossil-based energy as the yield was of greater magnitude. Certainty of regulation in the fossil energy sector would make budgeting easier. The result was that the government was more tempted to invest in fossil energy projects while ignoring development effort of renewable energy.
The government’s half-hearted support to renewable energy protect finally made the protect development seem to be losing steam. Not a single investors was interested: even state owned enterprise [BUMN].and yet for the long run, the use of renewable energy would be indispensable. It was about time to abandon the concept of short term profit and change to long term profit of the energy of tomorrow.
If the government were serious about securing national energy system, the development of alternative energy was the answer. Today national energy consumption was still relying on oil [49.7%], coal [24.5%] and gas [21.1%]. And yet as targeted by 2025 the portion of renewable energy would be 23% beside use of other alternative energy.
In fact the government knew very well that alternative energy resources were abundant in Indonesia; but the target would remain paperwork unless supported by serious government support. Apparently the Ministry of Finance as Government’s representation did not allocate any special budget for developing future energy. The reason was that the budget for such had been managed by the related ministries.
Word was out that budget for infra structure in alternative energy development had been distributed by the government to the respective ministries or institutions. The development of alternative energy itself was under the authority of the ministry of Energy and Mineral Resources. So it was almost certain that allocated fund for developing alternative energy resources was not specifically included in APBN-P 2013 budget, but there was a sum of money allocated for such at the ministry of energy and mineral resources.
About continuity of national energy policy, the government was still lifting oil production for next year. In RAPBN-P 2013budget it was agreed that the government had targeted lifting of oil to 840,000 barrel per day but for next year lifting of oil production was set at 1 million barrel of oil per day, provided that there was still plentiful oil reserves.
Rumors had it that the government and the Ministry of Energy and Mineral Resources [ESDM] had been coordinating to manage development of alternative energy. However, the development was more on geo-thermal energy and solar energy, the budget for this year alone had come to Rp100 trillion. This ministry of finance was not in a position the allocate more budget, moreover if the renewable energy could not produce electricity any cheaper than 7-8 cent Kwh.
So far the price of electricity from PLN had always been above 10 cent/Kwh. It there was no renewable energy which could offer price any lower than the, the government would not allocate any budget for it. In that case supposedly the government through the ministry of ESDM had the initiative to make a breakthrough so the development of alternative energy could be executed with support of the APBN State Budget.
It seemed useless if the government make any excuses if they were basically not interest in making any breakthrough. It should be borne in mind that for long this nation had been a net importer of the world’s refined oil. Supposedly there was a will power to change the status from net importer to net exporter of energy whereby to make forex reserves for the nation. Perhaps Indonesia had to wait for future change administration which was pro-alternative energy so all the ambitions could be realized. (SS)    

Business News - June 28,2013             

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