Revolution in Indonesia’s Oil Industry (3-end) *

Further problem that should be anticipated after the implementation of “pro competition regulation” in oil industry is mostly related with volatility of oil price and distribution of the oil. As we know that oil is a very sensitive good. The increasing of fuel potentially can create instability. Nevertheless, the explanation will be different if we relate or compare the effect of increasing fuel price with increasing price of other basic need such as food. Particularly for low or middle income people, the consumption share of fuel is absolutely lower than food. Therefore, the subsidy for all kind of fuel is actually only being beneficial for rich people. It may be true that the increasing price of fuel will affect to increasing price of other good. But, some research shows that the effect is actually lower than direct effect when the price of food increases. That’s why, it is better for people if government gives more subsidy to food sector than oil sector. Regarding to the current policy of oil subsidy, in my opinion government has set the correct policy by giving subsidy only for “low level of fuel”. It will be beneficial for low income people and prevent the absorption of subsidy by rich people. However, this kind of argument actually has not spread out to all people yet. The government should continue to giving explanation to people in order to reduce the shock affected by volatility of fuel price.
Related with the distribution of fuel, the emergence of Law No 22/2001 may make the distribution system of fuel will be more complicated. Now the distribution of fuel is not fully under control and responsibility of Pertamina. Each involved company has own distribution system to sell its product. It will become challenges for government to ensure the availability of fuel in every region of Indonesia. The possibility of scarcity of fuel will rise during competition period. Facing this problem, actually government already has institution that deal with managing the distribution of fuel. BPH Migas is the institution that deals with the problem. Thus, In order to ensure the availability of fuel in every region, government should strengthen the role of BPH Migas.
Based on all explanation above, we can conclude that deregulation of oil industry in Indonesia is on the right track. Current regulation has given benefit for consumer, Pertamina as national oil company and domestic economy in general. The law also has prepared all institution to solve various problems that potentially happen. So the urgent action that should be done by government in dealing with oil industry is strengthening those institutions and keeps supervising the implementation of the law.

*) this article has been posted at my previous blog. originally, it was written at 18 agustus 2008

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Did KPK Overacting? *

some are shocked by the backthrough policy launched by KPK in regard with the obilgation for the accused person to wear special uniform. in addition, KPK has prepared to involve in budget meeting of DPR. how should we response to those policies? hereby, i will just focus on the policy of involving in budget meeting. in regard with imposing special uniform for accused person, i definitely agree with them. corruption is special crime that potentially create massive damage in societey so the special treatment must be applied to the actors. as a notice the uniform has to remains respect to the human right and not violate the “pra duga tak bersalah” principles. for instance by appearing the label of uniform in accordace with the status of the accused persons.
how about the idea of KPK to involve in budget meeting? my position regarding to this idea is tend to be disagree. in principle, KPK tries to prevent the corruption since the very beginning stage of constructing the government budget. it is ok since KPK could ensure that monitoring system including the staff that they build is highly protected from the possibility of bribering and contaminate from external bad influence that could treat integrity of KPK itself. if KPK highly involve in the unclear systeam like ordinary governemnt system, it will potentially treat the clearence of KPK as institution that until now can be grade great. the best choice in my oppinion is keep stay outside of the system and work maximally when they found the violation of the regulation on the system. the basic principle should be awared by KPK is just like the principle on the soccer game that “the refree does not be permitted to involve in exercise section of particular club”. because when refree too close to the player, coach and management, it will potentially create what so called conflict of interest. Thus, keep stay away outside the system is the best choice of KPK if they want not loose their reputation. hopefully KPK can formulate the best decision…

*) originally the article was written at 12 agustus 2008

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Mempertanyakan Kebenaran *

ada logika menarik tentang kebenaran “jangan biarkan kebenaran jatuh kebumi karena akan membuatnya menjelma menjadi kekuasaan yang represif. biarkanlah kebenaran tetap menjadi mistery dan harapan. yang terpenting saat ini adalah kebaikan sekarang”. pemikir tersebut mengibaratkan kebaikan sebagai kosakata present tenses sedangkan kebenaran adalah future tenses. lalu dalam konteks apa pemikir tadi membicarakannya? beliau mencoba mendebat kebenaran samawi yang dituangkan lewat kitab suci. tentunya kalimat dalam tanda petik diatas merupakan kritik keras terhadap upaya implementasi “aturan agama” menjadi hukum positive.
apa yang bisa kita tangkap dan kita kritisi dari statement pemikir diatas? luar biasa sekali logika beliau sehingga mampu mendikotomikan kata kebaikan dan kebenaran sehingga menjadi begitu kontradiktif. konsep kebaikan sebagai yang terpenting adalah sebuah konsep yang meminggirkan iman dalam cara berfikir. salah satu “karakter iman” adalah iman terhadap sesuatu hal yang gaib. adanya hari pertanggung jawaban adalah sesuatu yang gaib dan karena kita telah dikabarkannya lewat kitab suci maka kita mengimaninya. memang benar kebenaran ini ada kelak di depan hari untuk pembuktiannya. tetapi konsekuensi dari mengimani kebnaran ini harus diimplemntasikan sekarang. karena kita yakin bahwa setiap apa yg kita lakukan sekarang akan dimintai pertanggungjawaban kelak dikemudian hari maka kita akan hati2 dalam bertindak dan berupaya agar setiap gerak searah dengan ketentuan yang memintakan pertanggung jawaban (yang notabene adalah zat yang mengabarkan tentang kebenaran hari pertanggung jawaban). dari logika ini kita tau bahwa kebaikan sekarang bukanlah satu2nya unsur pengontrol gerak kita. iman akan kebenaran yang memang masih mistery atau ghaib juga seharusnya punya peran bahkan mungkin lebih besar untuk mengontrol langkah kita. dengan iman itu bahkan kita tahu bahwa “apa yang menurut kita baik sekarang belum tentu baik untuk masa depan”. jadi menjadikan kebaikan sekarang sebagai yang terpenting adalah suatu sikap arogansi dari manusia yang serba terbatas. kecuali kalo iman pribadi kita mengatakan bahwa kita akan hidup selamanya. thing that absolutely impossible…..

*) artikel ini ditulis pada 12 agustus 2008.

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Revolution in Indonesia’s Oil Industry (2) *

The situation has already been changed, since the emergence of Law number 22 of 2001, Domestic oil industry has not being monopolized by Pertamina. Now Peratmina is just as own state company, which is operated in oil industry. The regulation function in oil industry has given back to the government, where here is represented by Ministry of Energy and Mineral Resources. Other essence of this law is the opportunity of other player either domestic or foreign to involve in oil industry in both upstream and downstream market. It means that this law promotes competition in domestic oil market. Besides that, this law also states the establishment of Badan Pelaksana Hulu Migas (BP Migas) and Badan Pengatur Hilir Migas (BPH Migas). BP Migas has authority to make oil and gas exploration contract and has being tasked to supervise the implementation of the contract. BPH Migas has responsibility in downstream market regarding to managing the distribution of the fuel and ensuring the availability of the fuel in any region of Indonesia.
To days, we can see the effect of competition in domestic oil industry. Particularly in fuel retail industry, now there are several foreign companies that involve in. As an effect, many SPBU, which previously did not consider about the service, become compete each other to satisfy the consumer. Now, we can see that all SPBU very considers about the quality of oil and measuring instrument. They are also giving additional facilities to increase the loyalty of customers. In many SPBU, we can find healthy and clean toilet, more representative praying place, various way of payment to buy a fuel, even cozy café and mini market is there. Moreover, they very considers about promoting its product. Some SPBU frequently sets new program to attract consumers. Finally, the customer will enjoy more benefits from these changes. It, of course, will increase the consumer welfare in general.
Considering about the changes, Pertamina has also made an improvement. The company set a program that known as Pertamina Way to response the rise of competition in oil industry. The program is focused on giving satisfaction services to the customer. The concept of Pertamina Way includes; (1) motivated and trained staff, (2) quality and quantity guaranteeing, (3) product knowledge, (4) standardized SPBU and (5) maintained equipment including fuel measurement instrument. Besides that, the improvement has also being done in upstream part. Now Pertamina does not only focus on domestic exploration. The company expands its market by involved in exploration tender bidding in several countries such as Brunei Darussalam and South Africa. It shows that Pertamina is on the way to be international oil company.
Regarding to the subsidy of fuel in Indonesia, it may be true that subsidy is still happen until now. Even the subsidy has going bigger due to the increasing of oil price, while Indonesia now is net importer of oil. Nevertheless, by omitting external factor, the subsidy paid by government now is lower than previous monopoly period. Today, not all kind of fuel being subsidize by government. The government only subsidizes the fuel that highly related with law or middle income people such as gasoline, law octane premium and diesel duel. This policy has reduced the burden of subsidy in budget and has given opportunity to other sector that also need subsidy to be more developed. Besides that, this policy makes Pertamina cannot rely much to subsidy to be survive in oil industry as happening under previous period. This policy also forces Pertamina to invent new non subsidized product that attract high class consumer to increase their profit.
Based on explanation above, we can conclude that the new regulation of oil industry is not only beneficial for consumer, but also encourage national oil company to be more efficient and innovative.
to be continued

*this article has been published at my previous blog. originally, I wrote it at July 9th 2008

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Revolution in Indonesia’s Oil Industry *

Oil industry is one of utility industries, which usually highly related with public interest. The sensitiveness of fuel is mostly in price, which in the past fully determined by government. A little change in fuel price usually effects to instability in society, even the stability of government can be threatened when government decide to set “unpopular policy”, which increase fuel price. People are very reluctant to take it policy because it can lead to increasing price of other basic good, which eventually will burdening their daily life. Therefore, government highly concern about the price and the availability fuel. Every effort will be done by government in order to keep the fuel price in certain level and to ensure the availability of the fuel in every region. To facilitate the achievement of those objectives, government gives Pertamina a right to monopolize domestic fuel market.
In the past, the management of the oil in Indonesia was fully controlled by Pertamina. The company monopolizes the oil from exploration to distribution. This action was fully supported even set by government. Government used the article 33 of UUD 45 to legitimate their full intervention in oil industry. The company, which is representation of government in oil industry, had behaved as both regulator and player in fuel industry. When any other company wants to involve, for instance in exploration of oil and gas in Indonesia, they had to get permit from Pertamina or at least made cooperation with it. Pertamina also monopolized fuel retail market. The company controlled distribution of fuel and had authority to give license for investor that wants to build gas station (SPBU). The selling price setting was also not free from involvement of Pertamina. At the time, fuel price in Indonesia was mostly subsidized by government. As monopolize company, only it that had the data of cost of production of oil. Therefore, the government had to involve it in setting price of fuel. In simple word, at the time Pertamina monopolized all aspect of fuel industry in Indonesia.
The monopolization of fuel industry by Pertamina, on one hand, might facilitate the government to achieve the objective of ensuring stability of fuel price and availability of fuel in any region of Indonesia, but, on other hand, it actually harm the economy in general. As economic theory, monopolization creates inefficiency and inequality on distribution of resources. In the monopoly market, a company tends to produce below its maximal capacity and set price above its equilibrium. It means that producer may absorb most of welfare in economy and consumer loss their welfare that actually can be enjoyed if the market is competitive. In the case of previous oil industry in Indonesia, the existence of Pertamina as monopolize company, create disadvantage on Indonesia economy in general. The cheaper price of fuel, which enjoyed by people at the time, was fully because of subsidy by the government. There was no contribution from Pertamina on providing cheap price through internal efficiency or new invented technology. Even the subsidy given by government was suspected create inefficiency in Pertamina. The company did not think about creating efficient institution in order to reduce the management cost. The company also did not think about inventing new technology in order to reduce cost of exploration. The real fact was showed clearly when Pertamina faced by international competition. The company was not being able to compete with foreign oil company; therefore there was no Pertamina exploration in other country. Thus, even though Pertamina looked like “lion” in domestic market, actually it was “shame cat” when faced by international competition.
In addition, monopolization by Pertamina also creates customer welfare loss regarding to services they get when go to gas station (SPBU). Many stories can be presented to support the statement. At the time, SPBU didn’t consider about the quality of the oil, such as Premium often mixed with other kind of oil. Besides, many SPBU manipulated its measuring instrument for taking more benefits illegally from the customers. SPBU also didn’t care to give additional facilitation to consumer, such as healthy toilet, representative praying place and alternative the way of payment.
In other hand, subsidy given by government to oil industry had highly burdened government budget. Actually that budget can be used to finance other important public sector such as foods, education and healthy. However, at the time Indonesia was enjoying “boom oil price”. As net exported country in oil, Indonesia took much benefit from the situation. Therefore, government did not reluctant to subsidy many sector including domestic oil industry. Nevertheless, the blessing of natural resources did not occur in the long time. Government will take difficulties when the situation is changed. Creating good institution in economy is most needed to ensure the sustainability of the economy.

*this article has been published at my previous blog. originally, I wrote it at July 9th 2008

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Ayu Utami dan Tri Utami *

Akhir-akhir ini aku lagi seru-serunya baca karya terbaru dari Ayu Utami, Bilangan Fu. Selalu surprise setiap kali membaca karya wanita yang satu ini. Dia begitu piawai mengangkat hal-hal tradisional bahkan primitive yang sudah banyak dilupakan oleh org2 menjadi pengetahuan yg sangat menarik. Setiap selesai baca satu bagian dari karyanya aku sering bergumam “oia ya… dulu pernah nih denger kisah2 seperti ini.. tapi dah lama banget.. aku pikir setelah simbah meninggal cerita2 spt ini sudah punah”. Detail2 hikayat yang tidak diketahui apakah itu fakta ato takhayul belaka di gabungkannya dalam cerita fiksi yang menarik. Tapi satu hal yg nggak berubah dari Ayu utami. Penghayatannya akan nilai2 kebabasan begitu mendalam. Membaca karyanya butuh kedewasaan berpikir yg luar biasa (sambil sering2 aja istighfar untuk meneguhkan iman). Exploitasi terhadap sex dan sadisme juga terasa cukup kental. Pada bagian ini seperti pembenaran atas judgementku ketika pertama kali mengenal sosok Ayu Utami. Waktu itu kutemukan namanya sebagai chief editor pada salah satu majalah dewasa Ibu Kota yang mungkin lebih panas dari Popular, Playboy Indonesia ato FHM. Aku inget reaksi pertamaku setelah tau dia di lingkungan ini adalah menjauhi setiap buku karyanya seperti aku juga untuk menjauhi karya djenar maesa ayu. “proteksi thdp ideologi” pikirku waktu itu. Semua berubah setelah aku pinjem “Saman” dari Mas Tion. keluasan pengetahuannya memaksaku untuk sedikit memberi perhatian lebih akan karyanya. Toh seperti dia bilang dalam Bilangan Fu “jadikan pengetahuan hanya sebagai data. Jangan biarkan ia mengaturmu karena sehuarusnya kmu yang berkuasa atasnya bukan sebaliknya”. Lalu apa hubungannya Ayu utami dan Tri Utami? Jawabannya adalah tidak ada. Cuma ada satu yang mungkin sedikit menghubungkan keduanya yaitu kata “kontradiktif”

*) ini merupakan tulisan yang sudah pernah dipublikasikan pada blog saya sebelumnya. artikel ini ditulis pada hari Senin, 8 juli 2008

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