Mon, 01 Aug 1994

Indonesia's oil prices increase to over $17

JAKARTA (JP): Indonesia's oil prices increased to an average of more than US$17 per barrel in June and July from less than $15 in the previous months, Minister of Mines and Energy I.B. Sudjana announced over the weekend.

"The price for our benchmark oil, Minas, even increased to $20.30 a barrel in the last two months from $17 previously," he told reporters after meeting with President Soeharto here on Saturday.

Sudjana said the price increase in the last two months has caused Indonesian oil prices during the first four months (April- July) of this fiscal year to average more than $16 a barrel, a level used by the government to calculate its revenues from the oil and gas sector.

According to its budget plan, the government expects to gain total revenues of Rp 12.85 trillion ($5.9 billion) from oil and gas this fiscal year, besides Rp 46.88 trillion from non-oil sectors and Rp 10 trillion from foreign aid.

Sudjana said the current increase in oil prices on the world market was caused mainly by increasing demand due to the severe summer in the northern hemisphere and the reopening of oil refineries in North Sea countries, as well as the political troubles in Nigeria and Yemen.

The hot summer in Japan, for example, has caused it to increase oil utilization because the water levels at the dams used to operate its hydro-power stations are dropping and operation of air conditioners is increasing.

"We expect that oil prices will remain high until the end of this year," he said. (riz/fhp)