[nasional_list] [ppiindia] Oil prices are too high, says Opec

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http://thestar.com.my/services/printerfriendly.asp?file=/2005/2/27/business/10277879.asp&sec=business

The Star Online > Business 

Sunday February 27, 2005

Oil prices are too high, says Opec
SINGAPORE: Indonesian oil minister Purnomo Yusgiantoro said the Organisation of 
the Petroleum Exporting Countries (Opec) ministers had formed a rough consensus 
that oil prices were too high, the International Herald Tribune reported 
yesterday.   

Purnomo also confirmed his government would hike fuel prices 29% and said an 
international oil firm had reported that a major new field had been found in 
his country, the newspaper said.  

Purnomo cautioned that Opec ministers would not necessarily agree to increase 
production at their next meeting in Iran on March 16 because they knew oil 
demand tended to drop in the northern spring.  

But, in comments matching those made by another Indonesian official on Friday, 
he said current oil prices were too high.  

"They have got to be lower than what we see today, because even Opec doesn't 
like to see the high oil prices," the newspaper quoted Purnomo, Indonesia's 
representative at Opec and a former Opec head, as saying in an interview.  

Purnomo said he would like Indonesian oil prices to drop to around US$35 a 
barrel by late spring.  

A senior Indonesian energy ministry official, Iin Arifin Takhyan, said on 
Friday that current world oil prices at around US$50 a barrel were too high but 
also said Opec did not need to cut production heading into the spring.  

High oil prices do not help Indonesia because falling production from ageing 
fields mean in some months it is a net importer of crude. The government also 
faces high subsidy payments when oil prices rise.  

Confirming comments by Indonesian lawmakers, Purnomo told the newspaper his 
government planned to announce a 29% increase in retail prices for gasoline and 
diesel.  

Purnomo said the hike, which he acknowledged was likely to trigger street 
protests, would be announced tomorrow night.  

Indonesia's poor pay only 700 rupiah (7.6 US cents) per litre for kerosene, 
less than half the retail market price of 1,800 rupiah per litre charged to the 
corporate sector.  

He declined to give details of the major oil find that had been reported by an 
oil company.  

However, he said recent discoveries should add 300,000 barrels per day to 
Indonesia's annual production for several years, allowing the country to 
maintain overall production above a million barrels per day.  

Indonesia has begun a review of its membership in Opec because of questions 
about whether it can maintain its status as a net exporter of crude oil. - 
Reuters


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