Throughout 2022, Crude Oil Prices Are Predicted To Increase 50 Percent

JAKARTA - Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, said that the price of Indonesian crude oil (ICP) may still increase by 50 percent in 2022.

Currently the ICP price has reached around 120 US dollars per barrel due to the conflict in Russia and Ukraine, while in the state budget (APBN) the ICP price assumption is 63 US dollars per barrel.

"So this is very high because the conflict between Russia and Ukraine is increasing energy prices," said Susiwijono, quoted from Antara, Friday, June 10.

Not only ICP prices, he said, natural gas prices in Europe also increased 10 times compared to 2020.

This is due to supply constraints, which mostly come from Russia.

Regarding transportation costs, disruptions have also occurred, such as high costs, especially cargo transportation by sea, scarcity of containers, and difficulties on ships.

The conflict between Russia and Ukraine has not only caused an energy crisis, but is also related to food, which is reflected in data from the United Nations (UN) reporting that the number of food insecure people has doubled due to the COVID-19 pandemic and conflicts between the two countries.

Susiwijono explained that this condition has caused the world's population to be food insecure from 135 million to 276 million.

In fact, he said, the impact of the conflict between Russia and Ukraine has also caused an increase in the number of food insecure people to 323 million.

"The FAO's average food price index in May 2022 has even jumped to 157.4. So the increase in food prices is already very high in the global market," he added.

To overcome the food crisis, Susiwijono suggested that existing food production lines in Ukraine and Russia, especially those related to staple foods and fertilizers, should be integrated, because there is still no effective solution outside of these steps.

Meanwhile, related to energy security, what needs to be pushed is the issue of maintaining energy supply, to investment in several alternative energies which are currently being explored.

Even though the scheme is already running, he assesses the need for alternative energy is getting more urgent and some capacities from world countries in this crisis.

"A strong political will is also needed in all multilateral forums such as the GCRG, G20, to G7," concluded Susiwijono.