Why does fuel oil’s price needs to be increase?

The issue that has been really warm recently is about the government’s decision to increase the fuel oil’s price. In my opinion, it is something that we really need to do immediately. The media has been focused on the demo to reject the increase of the fuel oil’s price, while they should have been focused on why does fuel oil’s price needs to be increase and why not. Here are the facts that I gathered to answer the question.

1. The price of the crude oil has increase to 100 USD per barrel. Even though Indonesia is one of the largest oil producers, but some of foreign company owns the oil in Indonesia. That’s one of the reasons why Pertamina still have to buy oil from other country.
2. The processing from crude to fuel oil is expensive. Through the distillation, stripping, and reforming to adjust the octane.
3.  It can help to stabilize the economy of Indonesia. By the government decreasing the subsidy, it helps to provide the budget to decrease the debt of Indonesia to other country.
4.  The main issue of the increasing of the oil’s price is the supply of the oil in the world is coming to an end. The consumption of the world’s oil is 85 million barrel per day, or 31,6 billion barrels per year. While the supply of the world’s oil is less than 1,3 trillion barrels. So approximately, the world will be ran out of oil in 41 years.

This is why we need to think of the long term, not only think about the effect of the present. If the citizens in Indonesia who protesting around just thinking about the present, how will their children and grandchildren survive? 

references: Tempo Magazine April 2012 ; www.imsresearch.com ; www.natgeo.com
Written by Thalita Nafitia Hiramsyah/1106847110