Oil prices to stay at'95 level

Oil prices to stay at'95 level

JAKARTA (JP): The government will not increase fuel oil prices
this year since an increase could cause strong inflationary
pressures, Minister of Mines and Energy I.B. Sudjana said
yesterday.

"We don't have any plans to increase fuel prices," Sudjana
told reporters after installing Soepraptono Soeleiman, a former
adviser to the minister, as the new director general of oil and
gas, replacing Suyitno Patmosukismo.

Last year's inflation rate stood at 8.64 percent, down from
9.24 percent in 1994.

The current fuel oil prices were set on Jan. 8, 1993.

According to Sudjana, the government has no reason to increase
fuel oil prices because the international crude oil prices have
been by and large stable at the US$16.50 per barrel level, the
price used to calculate the cost of fuel production.

Profits from domestic fuel oil sales are estimated to decline
to Rp 827.8 billion (US$359.56 million) in the 1996/1997 draft
state budget from Rp 1.47 trillion in the current budget.

Sudjana said that the $16.50 price set for crude oil is
appropriate since the international crude oil prices have been
hovering at that level.

Meanwhile, the president of state oil company Pertamina,
Faisal Abda'oe, confirmed yesterday that his company has no plan
to propose a fuel price increase to the government.

Abda'oe admitted that profits from fuel sales fluctuates along
with international crude oil price developments.

Indonesia produces 1.5 million barrels of crude and condensate
per day, of which 985,000 barrels of crude are processed in
domestic refineries and the rest exported.

Indonesia is also the largest exporter of liquefied natural
gas in the world with a total annual export of 25 million tons.
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