Today October 1st Gasoline IDR 14k [USD1] is too small a hike. The fact MOPS Singapore August [USD79] too low if compare new oil price [USD93-100]
UPDATE Oct 7th, DC 3.22pm
5 Hours before Palestine - Israel war or 21 hours ago [DC 10pm October 6th / Jerusalem - Jeddah - Tel Aviv 6am October 7th], Saudi has told the White House it would boost oil output in early 2024 if prices are high USD110 / barrel or higher, a move aimed at winning goodwill, greater good in Congress for a deal in which the kingdom would recognize Israel and get a defense pact with Washington.
Now a lot of analysts are reassured, nowadays war for the oil market, it's not October 1973 again -- but oil prices are still LIKELY TO RISE, but, not reach USD120 or higher.
Other analysts, still afraid of the Oil / Energy Crisis 1973 [after the Yom Kippur war exactly 50 years ago] repeated again, meaning oil price rocketed to USD140 or astronomical number. Especially because Saudi official statement ‘Blame Israel Occupation [as triggered latest war]’
Jeddah 7.54pm / Jakarta 11.54pm / Miami Florida 12.54pm
Scheme or calculation of energy prices in other countries may be different from Indonesia. But arguably the same rocketed.
In Indonesia, sspecially because 2023-2024 is the election year: (government) normally makes sure “whatever cost” to the stability of price.
I bet that if oil goes to US$102-103 / barrel, President ‘Jokowi’ Joko Widodo (& Pertamina CEO Nicke Widyawati) may try to hold ‘subsidized-gasoline’ not reached IDR 18K-19K [USD1.3 - USD1.4].
But if in October or November oil price rocketed to US$106-110 (or higher), Jokowi will give up and make sure that Parliament / DPR and Kemenkeu / Finance Ministry meet for revision of BUDGET (Revisi APBN). Similar decision may be followed by other country.
CEO Pertamina Nicke Widyawati [left]
The Indonesia government recently increased fuel prices to prevent an excessive burden on the state budget from subsidies aimed at keeping domestic fuel prices low despite high oil prices. However, some may wonder why even supposedly unsubsidized gasoline in Indonesia is still priced far below global standards. And it has a lot to do with definitions. Earlier this month, today Oct 1st, 2023, the government decided in the face of ballooning energy subsidies to increase the price of fuels, including the unsubsidized Pertamax gasoline, so as to close the gap between retail prices and the economic prices and thereby alleviate the pressure on state coffers.
Jokowi administration and Pertamina adjusting to surging global crude prices, highest since Ukraine - Russia war, state-owned oil and gas company Pertamina raised by around 6 percent the price of its unsubsidized Pertamax brand of gasoline. Pertamina said on Sunday that prices of the high-grade RON 92 fuel would be raised to Rp14.000 [USD1] per liter, from the previous price Rp13.000 [USD 91 cent] per liter, depending on the region. The company noted that despite the increase, prices were still below the economic value of Rp 16,000 per liter given that crude prices were averaging US$100 a barrel. The value was based on Indonesia Energy and Mineral Resources Ministry estimates [pict below, on Indonesia language]. Adjusting of price because of MOPS [Means of Platts Singapore].
The problem, MOPS between AUG 25 - SEP 24, is around 109 Singapore dollar [79.79 US dollar] - 123 Singapore dollar [90 US dollar]. In reality, Oslo 10.10pm [Sept 28, 2023], Brent already settled at USD 95.38/barrel [5 US dollar higher than 90 US dollar], WTI settled at USD 91.71/bbl [1 US dollar higher], Arab Light already USD 100 [10 US dollar higher] since Sept 26, 2023. So, next month or November 1st, 2023, Indonesia consumers will be facing another adjustment, 99 percent will be higher than today.
[announcement new prices, circulated since 11am-1pm, Oct 1st, 2023, in Indonesia Language]
[MOPS between AUG 25 - SEP 24, is around 109 Singapore dollar [79.79 US dollar] - 123 Singapore dollar [90 US dollar].
Click link for graphic
click link for graphic
For unsubsidized fuels, the 2015 reforms established a new price-setting mechanism. MEMR sets fuel prices using a pricing formula that can be summarized as follows, and it was most recently updated in MEMR Decree 62 K / IO / MEM / 2020 in February 2020.
Fuel price = Base Price + Constant + Margin
The base price is an estimate of the international price in domestic currency terms, calculated as Mean of Platts Singapore (MOPS) × adjustment factor × exchange rate. MOPS is the benchmark price for many refined petroleum products in Southeast Asia. The adjustment factor for a fuel depends on whether it is gasoline or diesel and its octane/cetane value.
For example, the base price for RON 90 gasoline is MOPS92 × 99.21%. MOPS92 is the Mid-Oil Platts Singapore price for RON 92 gasoline and it is adjusted by 99.21% to account for the difference in octane content between domestic RON 90 gasoline and the benchmark RON 92 price Indonesia used in the international market. The exchange rate from U.S. dollars to IDR is the average Bank of Indonesia exchange rate from the 24th to the 25th days of the previous month. Note that there is no formula in the decree for RON 88 Premium gasoline, the fixed-price lowest grade of gasoline in the market.
Pressed between high prices and stagnant incomes will burden another government, not only Indonesia.
With almost 70 billion euros, Germany is the country that is paying the most for and because of the Ukraine war. In his commentary for FREILICH, Jurij Kofner calls for support for peace negotiations and a stop to German arms deliveries to Ukraine as a first step. In a recently released commercial, US neocons openly celebrate the war in Ukraine as a lucrative proxy war. The fact is: In addition to the two direct warring parties, Germany bears the greatest damage from this conflict, while the USA is the biggest winner of the war. It is in Germany's interest to improve relations with Russia. At almost 85 billion euros, European humanitarian, financial and military aid to Ukraine is 15 billion euros (21 percent) higher than that of the USA, according to a regularly updated report by the Kiel Institute. With almost 70 billion euros, Germany is the country that is paying the most for and because of the war. Bilateral aid amounts to 20.9 billion euros, of which 17.1 billion (four fifths!) are arms deliveries. Another 35.1 billion euros are hidden in German guarantees for EU aid to Ukraine. And social benefits for the more than 1.1 million Ukrainian refugees who have come to Germany since the start of the war have cost German taxpayers a further 13.1 billion euros. Paymaster for war While Germany is sending its remaining weapons systems to Ukraine, it is buying new ones from the US arms industry: According to SIPRI, between 2021 and 2022 the industry almost doubled its exports to the Federal Republic of Germany.
A lucrative business model.
The Germany traffic light government [Red - Yellow - Green; Olaf Scholz’ SPD - red (centre), the Greens’ Annalena Baerbock and Robert Habeck, and Liberal Democrats Christian Lindner] is spending tax money on the war in Ukraine, while there is a lack of money for its own population everywhere.
The scale: 70 billion euros is as much as federal spending on research and education, health, family, business and housing combined. Or to put it another way: With 70 billion euros, the state could pay all daycare contributions for ten years, pay the own contribution for all those in need of care for five years or pay three annual salaries for half a million border police.
A shot in the own foot In addition to the direct payments for maintaining the war in Ukraine and caring for Ukrainian refugees, the German economy bears the highest costs through participation in Western sanctions and the energy embargo against Russia.
Even before the outbreak of the hot war in Ukraine, Western sanctions had cost German companies 5.4 billion euros (0.16 percent of GDP) annually since 2014. have particularly damaged European companies: 83 percent of the penalties were imposed on them in the last decade, while only three percent were imposed on American companies. Since February 2022, Brussels and Washington have significantly tightened their multilateral sanctions regime, from which Germany is suffering primarily due to the export bans and the energy embargo.
Mainly because of the EU export ban on dual-use technologies, German goods exports to Russia fell by twelve billion euros (45 percent) in 2022 compared to 2021, service exports fell by 30 percent, Negative effects of energy embargo.
As a result, Germany was forced to switch from relatively cheap Russian pipeline gas (an average of 12 to 21 euros per MWh in the 2010s) to much more expensive American liquefied natural gas, whose price in Europe averaged 140 euros per MWh between February and December 2022.
Even before the war, according to OMV, liquid gas was around 50 percent more expensive than natural gas. Actual goal not yet achieved The IW Cologne estimates Germany's welfare loss due to the energy crisis at around 65 billion euros in 2022. The DIHK estimates the combined costs of export bans and higher energy costs at around 91.4 billion euros per year. This corresponds to an impoverishment of around 1,500 to 2,200 euros per household per year. The USA has made a profit from the suffering of German consumers and producers. Between 2021 and 2022, American LNG exports to Germany increased 17-fold.
Across Europe, US liquefied natural gas exporters were able to earn an additional 23.6 billion euros. While the sanctions and energy embargo have significantly harmed the Germans and benefited the American economy, they have so far failed to achieve their ostensible goal of stopping the Russian war effort.
The negative effects of the energy embargo were ten times more drastic. In spring 2022, the EU imposed a ban on Russian coal and oil. In response to European sanctions, particularly those targeting financial transactions, Russia had to reduce its gas deliveries via the Yamal and Nord Stream 1 pipelines in the summer.
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-prada- Adi Mulia Pradana is a Helper. Former adviser (President Indonesia) Jokowi for mapping 2-times election. I used to get paid to catch all these blunders—now I do it for free. Trying to work out what's going on, what happens next. Now figure out and or prevent catastrophic of everything.
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