Hizb ut Tahrir Indonesia Statement
Decision of Plenary Session of Parliament Strengthens Liberalization of Oil and Gas in Indonesia

Plenary Session of Parliament which ended dawn Saturday, 31^st of March has agreed to Article 7, verse 6a of 2012 State Budget Law, which reads:

"In terms of Flat Rate of Indonesia Crude Oil Price (ICP) in running time is experiencing increase or decrease 15 percent on the average in the last 6 months from international oil prices which is assumed in the Revised State Budget 2012, the government has authority to make adjustments to the price of subsidized fuel and supporting policies."

In the Law of Revised State Budget 2012, parliament and government set new Indonesia Crude Oil Price/ICP) assumption of 105 US$ per barrel. Before it was 90 US$ per barrel. So, if the oil price in last 6 months experience increase or decrease 15% on the average, government will be able to increase or decrease subsidized fuel price.

According to data in ministry of Energy and mineral resources, ICP average in the last 6 months was US$ 116.49 per barrel, ICP of October 2011 US$ 109.25 per barrel, November 2011 was US$ 112.94, December was 2011 US$ 110.70, January 2012 was US$ 115.90 per barrel, February 2012 was US$ 122.17 per barrel, and March 2012 was US$ 128 per barrel. So, in these 6 months, the average increase of ICP is still 10.94% compared with price oil assumption which is set by government in Revised State Budget 2012 around US$ 105 per barrel. Thus, fuel price can't increase in 1^st of April 2012 as Government plan.

But the cancellation of fuel price raise in 1^st of April is only temporary. If the price of ICP continues increasing or it is consistent over 120 USD for at least 4 next months, according to the article, government will have right to raise fuel price. On the contrary, if ICP continues decreasing, government is given right to lower fuel price.

Therefore, Parliament Plenary Decision of yesterday can't solve fuel crisis but it asserts two points as indicators of liberalization strength in this country. First, Parliament and government have strongly decided to put oil and gas as pure commodity. Thus, in pricing policy it follows international price or market price - and it is illegal because the article 28 verse 2 in Oil and Gas Law as footing to relate fuel price with market mechanism has been amended by Constitution Court several times ago. Consequently, all form of calculations will refer to this. Here is the problem, what is the real production rate? Selling price? And how much is the subsidy? (And is "subsidy" term exact to use? those all will make debate around fuel problem unclear.

Second, Indonesia is now weak net importer country, raising International Oil Price become like disaster. Actually, if Indonesia was net exporter country by keeping production rate as before (Ever more than 1.5 million barrel per day) - over domestic demand - so, every raise of international oil price would be blessing. But now, liberalization in upstream sector (exploration) has been a rock barrier to increase production, oil wells have been controlled by foreign private corporations.

Regarding to this, Hizbut Tahrir in Indonesia states:

1- Parliament decision in the plenary session which add provision in Article 7, verse 6a of 2012 Revised State Budget Law strengthen more the liberalization in Oil and Gas in this country. And it also did not touch substantive of main problem around fuel polemics. Indeed, the government cancelled to raise oil price on 1^ST OF April, but the decision is only pending problem. If the fuel price really increases in the future, public reaction will explode louder. It is possible not impossible.

2- Consistently reject plan to raise fuel price although there is fact where the International oil continues increase and make ICP average over 15% from assumption in Revised State Budget because it is an unjust policy and really betraying people.

3- Raising fuel price and any policy are intended to liberalize natural resources especially Oil and Gas are against Islam.

Oil and gas and all abundant natural resources are public ownership according to Islam. All are managed by state for people prosperity. Therefore, all capitalistic policies namely liberalization in oil and gas, either in downstream sector including pricing policy or upstream one which is very determining for quantity of oil and gas production per day, and also unjust and betraying policy must be stopped soon. in spite of this, Oil and gas and all natural resources must be managed according to sharia. There is only one way for it, Implementing sharia completely by Khilafah "Caliphate" Islamiyah ‘ala minhajinnubuwah.

Hasbunallah wa ni'mal wakiil, ni'mal maula wa ni'man nashiir

Spokesperson of Hizb ut Tahrir Indonesia
Muhammad Ismail Yusanto

Hp: 0811119796 Email: This email address is being protected from spambots. You need JavaScript enabled to view it.