Fuel prices hike doesn't cause lower fuel usage
Fuel prices hike doesn't cause lower fuel usage
Tantri Yuliandini and Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
The rising price of gas has not stopped families like the
Sutanto's from maintaining their two-car, 200-liter-a-week
lifestyle. On the contrary they're quite happy to dish out more
than Rp 450,000 (about US$48) a month on fuel.
"Because we need them (the cars), and to take the children to
school. The price of fuel is just something we have to put up
with," Sutanto, 39, said.
Little does he, and others like him, realize that in just a
few short years he will have to dig much deeper into his wallet
to preserve the privileged lifestyle he now enjoys.
Analysts have repeatedly warned that the world's oil reserves
are depleting at an alarming rate. Hunter Herron of the Petroleum
Equities Inc., said that 90 percent of the oil produced today
comes from fields more than 20 years old.
At the same time, despite advances in technology, discovery
rates for new oil reserves are falling. "For every four barrels
used today, only one new barrel is found," Herron said.
Separately, the Ministry of Energy and Mineral Resources
reported that about 75 percent of Indonesia's energy still comes
from oil, with domestic consumption rising at an average of 6
percent annually. Meanwhile, production has been steadily
declining by an average of 2.8 percent per year since 1996.
The result of the rising demand and falling production is
increasing imports, which the government will have to pay for.
Between 1996 and 2000 alone, imports increased by a staggering
71 percent. In 2000, fuel product imports grew to 90 million
barrels at a cost of US$3 billion, up sharply from the 79.9
million barrels the previous year.
"People should remember that oil reserves are finite and we
could turn out to be a net oil importer if we don't start to
conserve," Director General of Land Transportation Iskandar
Abdullah said over the weekend.
Any sense of crisis is clearly absent today as Indonesians
have been lulled into a false sense of security for too long by
cheap, subsidized fuel.
Recent efforts to reduce subsidies by increasing fuel prices
and gradually bringing them up to international market levels are
based on the argument that subsidized fuel largely benefits the
middle and upper income groups.
Something that is the exact opposite of the original aim of
the subsidies, which was to ease the burden on the poor.
Iskandar acknowledged that significant price hikes should be a
major factor in promoting public awareness of fuel conservation
and encouraging people to look for alternative energy sources.
"The ongoing fuel price increases should provide an
opportunity for the government to promote energy conservation and
for people to change their lifestyles," Iskandar said.
So far, government campaigns on the effective use of energy
have merely been intended to counter widespread public rejection
of fuel and electricity hikes rather than to promote
conservation.
And the government's fuel conservation strategy has mostly
been aimed at getting people to look for alternative sources of
energy instead of reducing consumption.
Providing alternative fuel sources would be one way of
encouraging conservation provided the government was wholehearted
about doing so.
The introduction of car-gas (compressed natural gas) as an
environmentally friendly alternative to gasoline in the 1990s
barely got off the ground because of a lack of such commitment.
One problem is state-owned fuel monopoly Pertamina's refusal
to set up more car-gas stations other than the 17 stations
currently in operation around Jakarta.
"Since they were first opened (the car-gas stations), only 38
percent of them have been effectively used as not many people
like to use car-gas. That is why Pertamina has refused to set up
more car-gas stations around the capital," Iskandar said.
On the other hand, a former car-gas user, Bartha, said that he
had decided to give up on car-gas as there were simply not enough
car-gas stations around.
"For one thing, it's hard enough to find car-gas stations in
Jakarta. It's well-nigh impossible to find them outside of
Jakarta," he said.
Besides being environmentally friendly, car-gas is also much
cheaper, selling at Rp 450 per liter compared to Rp 1,750 per
liter for premium gasoline.
Just as Singapore has found a way to raise conservation
awareness by declaring a car-free day on Earth Day every April
22, the Indonesian government should also develop its own
measures to raise such awareness.
As long as it fails to do so, people like Sutanto will
continue their extravagant lifestyles, disregarding the fact that
fossil fuels will eventually run out.
"Maybe one day we'll think about other alternatives than
gasoline, but for now I still don't see any urgency."
Indonesia's Oil Reserves 1991-2000
(billion barrels)
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YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
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TOTAL 11 11.3 10.4 9.5 9.1 9 9.1 9.7 9.8 9.6
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* Data published by Pertamina