Indonesia Crude Price in April US$124

VIVAnews – The Indonesia Crude Price (ICP) was once discussed by the nation’s lawmakers last March when the government had tried to increase the subsidized fuel price. 

In a tough session, the House of Representatives (DPR) finally rejected the government’s plan to increase fuel price. Premium fuel and diesel fuel remained tagged at Rp4,500 per liter as long as the average ICP is below 15 percent of the assumed State Budget of US$105 per barrel. The government may rise fuel price if the ICP exceeds US$120.75 per barrel within six months in average.

So, what is April’s ICP?

In the Ministry’s website on Thursday, May 3, the ICP in April is US$124.63 per barrel, a US$3.51 decline from last March of US$128.14 per barrel.

From the average of the last six months, the ICP in November (US$112.94), December (US$110.70), January 2012 (US$115.91), February (US$122.17), March (US$128.14), and April (US$124.63), which makes up the average price of US$119.08. 

According to the Law on State Budget, the government cannot yet raise the subsidized fuel price as it is still lower than US$120.75. 

The cause of ICP decline 

The Indonesia Oil Price Team stated that the decline of crude oil price is in line with the progress of major crude oil price in the international market.

The first would be the ease in geopolitical tension in the Middle East following an agreement between Iran and the Western countries to conduct further negotiations in May related to Iran’s nuclear issues. 

Second, Saudi Arabia continues to increase crude oil production to maintain the increase in world oil prices. Currently, Saudi Arabia’s production has reached 10 million barrel per day, a rise of 1.1 million barrel per day from last year. 

Third, the world will still witness downturn in the economy, following the projection from the International Monetary Fund (IMF) which sets the global economic growth at 3.5 percent, a decrease of 0.4 percent from 2011. 

The European economy is figured to fall by 0.3 percent due to the debt crisis, which extends to Spain and Italy. 

Fourth, the projection of global oil demand in April has plunged from last month. The International Energy Agency revises this year’s global oil demand to 89.88 barrel per day, a fall of 0.02 million barrel from last month. 

OPEC has also revised this year’s global oil demand to 88.64 million barrel per day, a decrease of 0.01 million barrel from last month.