World Oil Prices Rise And Fall, Observers Remind Of Potential Increases In Fuel Prices

Illustration. (Photo: Doc. Antara)

JAKARTA - The world's crude oil prices which have been fluctuating recently have been responded by observers to have an impact on rising fuel prices.

According to Komaidi Notonegoro, Executive Director of the Reforminer Institute, the tendency of an increase in crude oil prices that occurs will have an impact on the selling price of fuel such as price increases which cannot be avoided.

However, Komaidi said that price increases could also be avoided if the government provided additional subsidies. In this case, the impact of the increase in oil prices will be determined by the fuel price policy of each country.

"Of course the choice is back to the government whether to increase it or not. Maybe not if you want to give subsidies," said Komaidi to VOI, Friday, January 21.

Quoted from Reuters, Brent crude futures were down 6 cents to $88.38 per barrel after surging to $89.17 per barrel the day before and was the highest level since October 2014 and has gained 13 percent so far this year.

Meanwhile, US West Texas Intermediate (WTI) crude futures for February delivery fell 6 cents to 86.90 US dollars per barrel on the last day of the contract's expiration.

The decline in oil prices is thought to be due to pressure from profit-taking by the market after prices rose to their highest level in seven years.

Komaidi also reminded the public and the government to be aware of the period leading to recovery from COVID-19 considering that there will definitely be an increase in fuel consumption.

"Consumption will definitely increase and prices have the potential to increase if production cannot keep up," he concluded.