REPUBLIKA.CO.ID, JAKARTA -- Average price of Indonesian crude oil (ICP), based on information from Ministry of Energy and Mineral Resources in October 2013, reached 106.39 USD per barrel. The price fell by 3.30 USD per barrel from 109.69 USD per barrel in September 2013. Minas price fell from 113.93 USD per barrel to 108.35 USD per barrel.
Energy analysts, Komaidi Notonegoro explained that ICP reduction was actually good for Indonesia as the reduced prices meant that government subsidies declined. However, the price was still above 2013 revised state budget and macro assumption worth 105 USD per barrel. One dollar increase in ICP will make the state spending increase up to four trillion IDR.
"The best state revenue only rise to 2.8 trillion IDR in every one dollar increase in ICP," Notonegoro said on Wednesday.
He predicted that fuel oil consumption in Indonesia would increase. The problem, Indonesia is not yet ready for mass transportation and cheap car program will be fulfill every roadway.
ICP price slump is in line with major crude oil prices in international market. There are several causes. First, weakening of world economy caused by decline in US economic growth from 1.7 percent to 1.6 percent in 2013. Second, Organization of the Petroleum Exporting Countries (OPEC) expected a decline in demand for OPEC crude in 2013, from 30.4 million barrel oil per day (bopd) to 29.9 bopd.
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