Indonesia to build energy buffer stock: Energy Minister

Indonesia to build energy buffer stock: Energy Minister

Sudirman Said. (ANTARA/Ismar Patrizki)

Jakarta (ANTARA News) - The government said it will take advantage of the falling price of oil to build an oil buffer stock and strategic operation to strengthen the countrys energy security as recommended by the National Energy Council (DEN).

"That is a good recommendation. In fact we already have it long in our plan but the opportunity has not come," Energy and Mineral Resources (ESDM) Minister Sudirman Said said here on Thursday.

On Wednesday DEN asked the government to set up oil buffer stock taking advantage of the falling prices of oil.

"We will look for the right way of making full use of the oil price fall to build a stock. Our national stock is only consumption stock, there was no strategic stock," Sudirman said.

DEN also asks the government to allocate energy subsidy to finance development of renewable energy and create a transparent system of fixing oil fuel (BBM) prices.

"One of our focuses is development of bio-fuels (BBN)as a new and renewable energy source," Sonny Keraf, a member of DEN in charge of the environment affairs, told reporters here on last Wednesday.

Sonny said the oil price fall provided a good momentum to evaluate BBM subsidy and allocate the subsidy for BBN to make the BBN competitive in price, he said.

He also said that in all gas contracts, which are generally long term , there must be a clause about renegotiation on price allowing price adjustment any time that the prices would remain reasonable and fair to both producer and consumers.

On Thursday, Sudirman said the government already has an idea to form strategic energy stock , but so far the budget has been used for energy subsidy.

He said ideally, Indonesia should have a strategic energy reserve especially oil to guarantee supply for 30 days in the event of emergency.

He said the government would soon bring the idea to reality as the government already has fiscal room for it after the abolition of the subsidy on premium gasoline amid the shrinking oil prices.

"We continue to watch the price falling . We are adjusting the price of BBM and in a right time it will be announced. But first I have to revise the regulation of the ESDM minister," he said.
(Uu.H-ASG/H-YH)

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