PRESIDENTIAL CANDIDATES STILL NOT FIRM ABOUT SUBSIDIZED OIL PRICING

The Professor of Faculty of Technique of the University of Indonesia Iwa Garniwa had not heard any firm statement by two Presidential Candidates about energy policy and APBN State Budget. The two subjects were closely related, both anchored on price of subsidized oil. “There is not any Candidate who had spoken firmly. What to do about price of subsidized oil? Let there be no grey statements” Iwa disclosed to Business News [3/6].

The related problem was oil-gas infra structure. Building of one oil refinery plant needed cost of Rp60-70 trillion per plant. the cost was for normal production capacity. Meanwhile APBN State Budget [APBN-P] allocated extra subsidy of Rp100 trillion, so there could be one and a half additional plant. national oil production was also highly reliant on mew plants. “But new processing plants would not produce until 2016 or 2017. We are still in deficit an must constantly import oil. Besides oil subsidy, we also had to face procure subsidy for electricity and fertilizers.” Iwa remarked.

Meanwhile the Success Team of two opposing candidates claimed they had set up the best Mission-Vision for national energy resilience. Even Dradjad Wibowo of Subianto candidate explicitly praised firm attitude not to sign the contract extention of PT Freeport Indonesia.”Hatta Rajasa strongly and daringly objected President SBY’s order to sign the Freeport contract. Brother Hatta openly refused to sign the Freeport extention agreement by reasoning it’s too early and too soon” Dradjad said.

They [the Freeport renegotiation team] had met the Ministry of Finance. Hatta Rajasa refused to sign because it’s too soon to do so. “I like Hatta’s firm attitude” Dradjad disclosed to Business News sometime ago.

Dradjad also underscored that the oil fuel pricing program was aimed at the rich. The mechanism was through program. Hatta Rajasa as Vice President candidate of the Prabowo-Hatta Team fully understood that oil subsidy was unhealthy for the application of APBN State Budget, while Cash Aid for the Poor only bring short term benefit to the poor people. “Subsidy remains to be given, but oil price is increased. Only the rich will be hit”

Meanwhile members of the Jokowi – JK Presidential candidate supporting team recommended cheap energy program for the poor people. The present Government had been struggling with oil sub­sidy problem. In fact the root of problem was that the Government had failed in controling effort. "The present Government was having head ache in silving the oil fuel problem. The had failed in the application of subsidy" Darmawan Prasiojo, Jokowi-JK supporter told Business News [3/6].

Failure of the present Government had begun ever since their first 5 year period of office. Even State Owned Enterprises like Pertamina oil-gas company, give up. "Failure of the subsidy program was loud and clear. There is conflict of interest so infra structure development including oil and gas pipelining became target. The Rp 12 trillion project for popelining in Bontang was kept hostage. It seemed the mistake would be repeated by Prabowo-Hatta. We can smell it out, they plan to give away chairs, including a position of Prime minister". (SS)

Business News - June 6, 2014