Indonesia cuts oil prices
January 12th, 2009 - Posted in Energy PricesJAKARTA, Jan. 12 (Xinhua) — Indonesian President Susilo Bambang Yudhoyono announced subsidized-oil prices cuts on Monday to boost purchasing power.
The move was Indonesia’s latest effort to cushion the deepening fallout of the global recession, following the fall of global oil price up to over 40 U.S. dollars per barrel after reaching record of 147 U.S. dollars a barrel in July.
The Southeast Asia largest economy reduced premium prices from 5,000 rupiah (some 0.45 U.S. dollar) per liter to 4,500 rupiah (about 0.41 U.S. dollar) per liter and diesel oil from 4,800 rupiah (some 0.43 U.S. dollar) per liter to 4,500 rupiah (about 0.41 U.S. dollar) per liter, President Susilo said.
“The oil prices cut will kick of on January 15,” he told a press conference at the State Palace after a cabinet meeting.
President Susilo hoped that the prices reduction would have influence on the reduction of prices so that to raise people spending power.
“We expect the decision to have influence on prices of goods,” he said.
The cuts has been the third since the government rose the prices over 30 percent in May to reduce mounting subsidies following the rising of global oil price.
Indonesia is struggling to boost spending power as an effort to spur sagging economy which is forecast to face deepening fallout of the global recession at the first half of this year.
Thank to the stimulus package, good outlook of inflation performance and high spending on the legislative and presidential poll in April and July this year, which are predicted to be able to lessen the impact of the recession, the government is still optimistic that the economy may expand to 5.5 percent, according to Minister Mulyani.
Indonesia reduced twice of the subsidized oil price in December.
Indonesian authorities cut subsidized oil prices on Dec. 1 by 8.3 percent to 5,500 rupiah (some 0.51 U.S. dollar) per litter. On Dec. 15, it reduced the gasoline price by 9 percent to 5,000 rupiah (about 0.45 U.S. dollars) per liter and diesel oil by 13 percent to 4,800 rupiah (some 0.43 U.S. dollars) per liter.
