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. (04)