On the front page of the edition of Tempo From April 6 to 12, Indonesian President Prabowo Subianto, left, and his ministers sit on a dangerously low gas cylinder and all seem very annoyed. “Fuel under pressure, gas not found†, headlines the Jakarta weekly.
While most major importing Asian economies have taken emergency measures to cushion the energy shock and prepare their populations for the worst, Indonesia, where at least 25% of oil imports and 30% of liquefied gas imports pass through the Strait of Hormuz, shows a suspicious optimism.
Since the start of the crisis in the Middle East, Jakarta has worked to repeat that the situation is under control, reserves covering twenty-one days of consumption, and that prices for households will be preserved. Japan, although much better endowed – with more than eight months of stock – immediately drew on its strategic reserves.
Déni de réalité
Pour Tempo, this posture reveals a dangerous denial of reality, which directly exposes public finances, in a context of largely subsidized consumer prices. Each additional dollar on the barrel of crude oil increases the burden of energy subsidies by several hundred million dollars. An overload which could be contained by targeted measures, such as fuel rationing to 50 liters per day and partial teleworking.
More “these measures struggle to convince that they will be able to fill the budgetary hole caused by the increase in subsidies and compensation†, écrit Tempoand their effectiveness is further questioned. “The majority of workers do not travel by car†, and the fixed ceiling remains well above average consumption.
The gas issue turns out to be even more sensitive, underlines the newspaper. Because, “while it is possible to limit travel to save fuel, a shortage of domestic gas quickly becomes a question of survival†for millions of households who rely on it for cooking.
“It’s time to raise fuel prices… title of one of the articles in the issue: it is “the only credible option to save the state budget†. If this unpopular decision is politically risky, recognizes the newspaper, a “collapse of the state budget would have far greater consequences†. “For a president who wants to be the ‘Tiger of Asia,’ the time has come to roar, not to meow… concludes Tempo.
