, 19 May 2013 | 12:37
A study shows that women can live longer than men because
women's immune system age more slowly.
, 19 May 2013 | 11:51
The visit is to help students to gain understanding on some
factual problems in the development of Indonesia
Friday, 08 June, 2012 | 11:58 WIB
Indonesia May oil price below level to trigger retail fuel hike
TEMPO Interactive, Jakarta:Indonesia's benchmark crude price edged up to an average of $119.22 a barrel over the past six months, below the level needed to trigger a government hike in retail fuel prices.
Indonesia's parliament in March gave the government the right to lift motor fuel prices in Southeast Asia's largest economy if the Indonesia Crude Price (ICP) averaged $120.75 a barrel over six months. The six-month average was at $119.08 a barrel in April.
That looked likely in March as global oil prices rose, but renewed worries about weak global demand drove down oil prices in April and May. Oil prices would need to surge again in coming months to allow any retail fuel increase, a prospect that looks unlikely given Europe's debt crisis.
Keeping motor fuel prices steady will reduce a risk for inflation, giving the central bank room to keep interest rates low to support economic growth in the G20 member. It will also prop up fuel demand from Asia's largest gasoline importer.
Bank Indonesia, which meets to discuss policy on June 12, expects inflation to fall within its 3.5 percent to 5.5 percent target without a fuel price hike.
"With the subsidised fuel price hike most likely out of the picture, we expect the inflation rate by year-end to reach 4.96 percent year-on-year, slightly higher than BI's estimate of 4.5 percent," said Bank Danamon in a report.
The government has been aiming to reduce the use of subsidised fuel, which costs just half the market rate, for over a year, but has struggled to persuade lawmakers to approve the politically unpopular measure. Fuel price hikes in 1998 led to protests that ended autocratic leader Suharto's rule.
Fuel subsidies cost the government $18 billion last year and are threatening to widen its budget deficit this year. The government wants to spend the money on infrastructure instead.
The World Bank has said it sees the failure to reduce subsidies as a missed opportunity to redirect government spending for development needs.
Ratings agency Standard & Poor's surprised financial markets by keeping the country's credit rating one notch below investment grade in April, citing policy slippages and the country's lack of progress on subsidy reform.
The government is now trying to curb the use of subsidised fuel by banning government vehicles from using it and by restricting its supply, but that policy is running into problems as public officials still try to fill up with cheap fuel. Governors in resource-rich Kalimantan also threatened to halt coal exports if their region did not get more subsidised fuel.