National oil conspiracy

The government's policy of keeping domestic fuel prices as inexpensive as possible, all in the name of protecting the poor, must count as the biggest national conspiracy ever concocted by the country's ruling elite. The poor are the very last people to benefit from the cheap fuel policy which has been sustained for decades through a heavily subsidized system.

The real beneficiaries of the subsidies are the rich. The richer you are -- represented by the number of cars you have, the amount of air travel you make, and the bright lighting in your mansions -- the more money you are actually extracting from the system, all at the expense of the rest of the nation.

Industrialists also count among the biggest beneficiaries of the cheap oil policy. As a powerful lobby group, they have always been the most vocal in opposing increases in prices. They argue that raising fuel prices would undercut export competitiveness, and in turn would cost the nation jobs. Such an eloquent argument is nothing but blackmail to ensure that cheap oil will continue to flow to their factories and sustain their profit margins. They care not that they are effectively exporting the subsidies -- good taxpayers money -- abroad.

Foreign buyers of Indonesian products inadvertently become the beneficiaries of the cheap oil policy although they are not part of this national conspiracy. Combined with the cheap Indonesian labor employed to produce these goods, Indonesia has been running a grand sale with products at virtually give-away prices.

The oil subsidy system has produced its share of profiteers and manipulators who have been smuggling cheap Indonesian oil products abroad, mostly to Singapore. That this operation has been going on for years without any real effort by the government to stop it further testifies to the collusion at the highest levels. The racketeers as well as the final buyers of the smuggled products, whoever they may be, are another group of people to have benefited from the oil subsidy.

The cheap oil policy is probably the most devious scheme that the country's rulers, along with their business friends, have ever designed in their efforts to plunder the nation's wealth while professing to act in the interests of the people. They are not only deceiving the poor but they are also selling the nation down the drain.

They are depriving the nation's children, grandchildren and great grandchildren of their rightful share of the nation's precious natural resources. With the loans from the International Monetary Fund plugging the government's huge budget deficit this year, they are even making the children, grandchildren and great grandchildren pay to support their subsidized lifestyles.

Sadly, few people have ever spoken out against the cheap oil policy as can be seen from the comments ahead of the 12 percent average increase in domestic oil prices which came into force on Sunday. Even non-governmental organizations, who claim to fight for the poor, have opposed the increases. Politicians, including the likes of Akbar Tandjung, were quick to distance themselves from the increases even after they had endorsed the plan earlier. Opponents of the fuel price increase sang the same tune: Protect the poor people.

How long can they keep up this game of deceiving the entire nation? Thanks to their own greed, the answer is not very long.

The cheap oil policy is responsible for the grossly inefficient use of oil in Indonesia. Other countries that are not as blessed (or as cursed) as Indonesia with oil resources have long introduced energy conservation measures. Indonesia has not, and as a result, its oil resources have been depleting at a remarkably fast rate. One recent industry estimate says that in less than 10 years, Indonesia will have to start importing oil products more than it can export to meet domestic needs.

If and when that happens, no politicians in this country could use fuel as a weapon to gain popularity or votes the way it has been used these last three decades. Indonesians will have to pay the going international market price for their fuel. And judging by the trend in the world markets, by that stage oil prices will have settled at above $30 a barrel. Compare this to the $10-$20 price range when Indonesia extracted most of its oil and our children and grandchildren will have every reason to curse us.

Although we cannot undo past mistakes, we can and must rectify them. We can still begin energy conservation measures, including most of all by quickly phasing out the oil subsidy. Unfortunately for our politicians, the most responsible and right thing to do is not always the popular thing to do.

This week's 12 percent increase would hardly take domestic fuel prices anywhere near world levels. With so little time left before Indonesia becomes a net oil importer, it is the responsibility of present day leaders to prepare the people, whether rich or poor, for an era when they have to pay the going market prices for their fuel, just like other people in most other parts of the world.