Saturday, April 19, 2008

bullish on oil price, bearish on welfare ?

pertamaxscared was more reliable word to describe my feeling, today in detikfinance i've read that for 1st time in history oil has reach USD 117 per barrel. it was way too expensive. And my worries has risen since indonesian government has policy to subsidized it's retail gasoline consumption. I check the gasoline pump near my house and shocked that the non-subsidized gasoline Pertamax sells at IDR 8600, which is almost twice as the subsidized gasoline Premium (sells at IRD 4500).

What this would mean? This would mean that government spending on gasoline subsidy will increase also, leaving other development program unfinanced. and though the broad consumed Premium subsidized, it is another story for industry-oriented gasoline. The gasoline increase means increase in the price of energy, for some who processed natural oil derivatives product (plastics, etc) this also mean increase in raw material.

Government has launch conversion program, for kerosene (used as cooking fuel in indonesian households) converted to natural gas, the conversion wasn't a smooth one, in many cases the kerosene supply stopped before natural gas pack available on market, leaving most people unable to cook, not to mention that rumors has a telling that cooking pad which given by government has a lack of safety and causing several serious fire blaze (they say there is problem with parts that channeling gas from its pack to a cooking pad). Though not perfectly launch i still have support on this programs, do you know that actually kerosene produced using the same oil fracture as airplane fuel?

Some opinion has come up that government should rise the Premium price to release heavy burden on government budget. While I personally quite worry if government rise Premium Price (since this will affect people's pocket much more direct), i can see the urgencies. But however the issue quite sensitive here, we can hear almost everyday "expert" say that government should increase the price of Premium, while other said exactly the opposite. For the ruling government this could also affect their popularity and determine their position in the next election (will held at 2009).

For me, should i retire my car instead .....??  


kawel said...

Nice Article

Rackmount LCD said...

Thanks for informing us… :lol: