HIGH PRICE OIL : ITS CAUSALITIES and ALTERNATIVE SOLUTIONS

Afzalurrahman Assalam, Teknik Geofisika ITB, Peserta PPSDMS Regional II Angkatan 2

We could not ignore, that the price of oil is too high for us and the entire world. People says that it will be 100 U$ / barrel at 2008. How come? Some analyzes state that it is caused by increased of geopolitic temperature, regional heated in Turkey-Iran boundary state that affected from the war between Turkey’s army and Kurdistan traitors who live in Iran. But the most influence issue is the decreasing of oil reservoir in the entire world. Thus, this issue is following issue from the ‘Peak Oil Theory’. Peak Oil Theory says, all of oil reservoirs will end but the need of oil still increasing. Then, this will make increasing price of oil so drastically and make people have to choose another energy.

International Herald Tribune wrote, increasing of oil price will enrich oil producer countries, such as Russia, Norway, Venezuela and most of middle east countries. These countries will have a new economic power in economic world and will change the map of economy in the world. But, ironically, people from the oil nett importer countries will be poor more and more. This increasing price, have endorsed them to make some policies, such as the increasing price for fuel or gasoline for people in their countries. This erases the government’s chances to locate the money for people welfare, including education and health delivery.

This increasing, make some economic analysts angry, the objects are the speculants. The oil price is not depending on demand and question any more, but more complicated than that. Actually, the oil world question is stable, around 85 millior barrel per days. But the oil price was increasing from last August, 40 %. The oil reserves is not in problem, but the speculant who played the market. Another analysis says, the price should be not more than 55 U$ per barrel. The player may be the biggest fund institution in USA, UK and another country. This market is crazy, people just need money and money, and bet for the increasing price. The maximum increased price is 100 U$ per barrel. If the price 100 U$ per barrel, the economic correction will be there soon.

About Indonesia

Until now, oil still be the premier energy in the world. The increasing price makes the production price be high too, and the consuments are the victims. Indonesia is not the exception. The industrial sector in Indonesia is the victims too. Textile industry as a sample. This industry uses oil for production. The preventive action should be done, like enlarging the market network and choosing the machine that more effective and effiecient. Another alternative solution, Indonesia’s industrial textile must learn from China, India and Turkey. Textile industry in china is supported by their government with financial support.

So, what the planning should be the government’s choice? What the government planning to anticipate, if the price resists at 80 U$ or even 90 U$ per barrel? So far, the significant response from the government is just accelerate the time target of fuel conversion to gas program, from 2012 to 2010. This is not just that simple, because the infrastructure’s problem and not ready yet. Seems The government must be forced by the real condition to make their fast response. This long time, they are not serious in diversification dan conversion program.

For a long term, economic trouble caused by the price oil crisis just can be solved if fundamental problem from the either supply side and question can be solved first. In this case, diversification and conversion program can’t be ignored again. From this all aspects, Indonesia seems late. The big depending on oil now, represent from the bad energy policies, where the priority of developing renewable resources not getting place. Even, the policies support to use fossile energy that dirt, expensive and non-renewable.


The industry and people is not ever been prepared. The government still at nostalgia, when we were rich in oil reservoir. They are still thinking, oil as resources that can not end, and so using this energy is not efficient, however Indonesia is not nett exporter oil any more. The late response while the price oil crisis at the later time, prove that the government is not in full-awareness, and not have a sense of cisis yet.

The price oil crisis nowadays, must be the big lesson for us and the government, and as a bell to remind and to aware for preparation before its too late.

Satu Tanggapan

  1. I follow your blog for quite a long time and should tell you that your articles always prove to be of a high value and quality for readers.

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