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| Sunday, 27 February 2005 |
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OPEC sees oil prices are too high SINGAPORE, Feb 26 (Reuters) - Indonesian oil minister Purnomo Yusgiantoro said OPEC ministers have formed a rough consensus that oil prices are too high, the International Herald Tribune reported on Saturday. Purnomo also confirmed his government would hike fuel prices 29 percent and said an international oil firm had reported 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. "It has got to be lower than what we see today, because even OPEC doesn't like to see the high oil price," the newspaper quoted Purnomo Yusgiantoro, 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 $35 a barrel by late spring. A senior Indonesian energy ministry official, Iin Arifin Takhyan, said on Friday current world oil prices around $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. As well, the government faces high subsidy payments when oil prices rise. Confirming comments by Indonesian lawmakers, Purnomo told the newspaper his government planned to announce a 29 percent increase in retail prices for gasoline and diesel. Purnomo said the hike, which he acknowledged was likely to trigger street protests, would be announced on Monday night. Indonesia's poor pay only 700 rupiah (7.6 U.S. cents) per litre for kerosene, less than half the retail market price of 1,800 rupiah per litre charged to corporates. He declined to give details of the major oil find he said had been reported by an oil company. But 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 of the Organisation of the Petroleum Exporting Countries (OPEC) because of questions about whether it can maintain its status as a net exporter of crude oil. |
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