Thu, 10 Mar 2005

Increase asphalt prices

State oil and gas company Pertamina should increase asphalt prices. Pertamina is Indonesia's major oil refiner and producer of asphalt, which is mainly used for road building and maintenance. These road projects are paid for by the government, and are often in turn funded by foreign aid.

Pertamina asphalt production is not enough to meet the demand and Indonesia has to import asphalt every year at much higher international prices. If Pertamina were to increase its asphalt price to world market levels, and use the extra income to help subsidize low fuel prices for the poor, I am sure the international donors and project financiers would have no objections.

This asphalt price increase would not impact directly on the general public and may also encourage investment in the petrochemical sector.