RI Tariff Agreement With AS Win-Lose Solution

JAKARTA - Energy Economy Observer at Gadjah Mada University, Fahmybulki, assessed that the reciprocal tariff agreement between Indonesia and America which was set at 19 percent was not a win-win solution but a win-lose solution.

According to him, in order to get an agreement of 19 percent, Indonesia must pawn what it has, including providing free access to Indonesia's natural resources, including copper.

"If you chase 19 percent then pawn everything, including copper. Then imports of fuel, I think this is actually detrimental to Indonesia," he said when contacted by VOI, Thursday, July 17.

Fahmy added, so far Indonesia has imported crude oil and fuel from various countries. He gave an example, for Indonesian crude oil to import from countries in the Middle East, while fuel is imported from the White Lion Country, Singapore.

"Because Singapore receives oil from various countries and processes it at refineries in Singapore which is relatively cheaper because the logistics costs are not so large," he said.

Meanwhile, if oil imports are carried out from the US, he questions the suitability of crude oil sent from the US with the specifications of the Indonesian refinery. If it is not appropriate, continued Fahmy, Indonesia needs to make adjustments to existing refineries so that it must pay additional costs.

"If it is not suitable and there needs to be adjustments, then it must increase costs. The logistics costs are large, then the adjustment costs are needed," explained Fahmy.

Then for fuel commodities, according to him, Indonesia consumes the most Pertalite. Meanwhile, fuel imported from America must go through a blending process.

"The question is whether the US can blend earlier. So my parents are too forced to catch up 19 percent," said Fahmy.

He assessed that there are still many choices of countries that can be invited to cooperate in importing oil and gas products rather than having to comply with the tariff rate of 19 percent.

"I think the state of BRICS is quite large too. Or in my opinion, there are also many EU countries that can. So if you submit too much to the US, I think it will be detrimental to Indonesia. It is too forced," said Fahmy.