Thursday, May 29, 2008

Indonesia Leaves OPEC

Indonesia left OPEC today.

"Actually there is also one rationale -- that we are not happy with the high oil prices. Because we are an oil producer and we are an oil consumer," energy minister Purnomo Yusgiantoro said.

Output is down, membership dues are up, and the country buys more oil than it sells, according to the Reuters article in the NY Times yesterday.

"Indonesia raised fuel prices by an average of just under 30 percent on Saturday, as it struggles to plug the fiscal hole left by soaring crude oil prices."

Indonesia has an output of 927,000 per day. They were used to exporting a lot of oil -- their output is on the wane now -- and they can't afford to buy oil at the prices they are forced to sell them at.

"Fuel is still subsidized in the country where millions of people live on less than two dollars a day, with the government expected to spend billions of dollars keeping fuel costs among the lowest in Asia."

Two dollars a day. How does the oil system work there? What do they use oil for? Heat? Cooking?

This from The Energy Wire early this month at The Washington Post on-line:

"Many countries - especially in the developing world -- are actually directly subsidizing fuel prices. In the name of helping their citizens cope, they are subsidizing energy waste, subsidizing an addiction to imports, and subsidizing the growth of greenhouse gas emissions.

Of course, as oil prices rise, so do the costs of these fuel subsidies. Many of these countries are also trying to hold food prices steady as the prices of global food commodities soar."

I imagine our numbers could look a little like that to parts of Europe as the dollar falls and we discuss a gas tax holiday... fuel is still subsidized in the country where millions of Americans can't afford to keep their heat on in the winter.

According to the Bureau of Labor Statistics the median full-time working man in this country made about $100 per day last year.

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