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ndonesia’s fuel price hike seems inevitable. The price rise follows the world oil price that has risen due partly to the rising tensions between the US and its allies and the world’s second largest oil exporter, Iran. Bizarrely, the US with thousands of state-of-the-art nuclear weapons and Israel with hundreds of them are afraid of the possible development of Iranian first-generation nuclear weapons.

They try shamelessly to stifle the Iranian economy by barring Iranian oil exports, the main source of Iranian revenue.

The current oil price hits Indonesia’s government budget hard. As a net importer of oil Indonesia has to dig deep into its pocket for subsidies. The gasoline and cooking fuel subsidy will rise to Rp 137.4 trillion (US$ 15 billion) from the originally forecast Rp. 124 trillion, with electricity subsidies increasing to Rp 93.5 trillion from Rp 44.9 trillion.

The government has given up and will submit a proposal to the House of Representatives to raise widely used low-octane gasoline from Rp 4,500 a liter to Rp 6,000 in order to keep subsidies of fuel and electricity affordable in the budget.

Unfortunately the fuel price hike is not a single event. It has consequences as it leads to a chain reaction. All prices of goods and services will rise too. On paper, an oil subsidy is not good for the economy. The subsidy makes us irresponsible in using fuel and electricity. The money would be better used financing education, infrastructure, etc. That works in theory.

But as a layman, I don’t care for it. In Indonesia, I need these subsidies. The reason is very simple, if all subsidies are repealed, will the money be used for the sake of people’s welfare? I don’t think so. Given the known facts about fraud, some is sure to go to corrupt officials. But does the government really have no alternative?

This brings us back to Iranian oil. An avenue emerges from the current situation. Now the Indonesian government has an alternative not to raise fuel prices. The action is simple: buy Iranian oil and ask for a discount.

Iranian oil is now a distressed commodity. Some countries under US pressure will try to wean themselves from importing Iranian oil, but Iran must still sell its oil. Accordingly the price of Iranian oil can be negotiated. It is said China has asked for a discount.

By doing this, Indonesia is not bowing to America, the bankrupt superpower. The sanctions on Iran are absolutely unfair and shockingly stupid. If America wants the world to be free of nuclear weapons, it is fine; but America and its allies must also remove their own preponderant nukes. Iranian nukes will be as horrible as Israeli nukes are. The best option is no nukes on earth, bar none. It’s just simple logic. Buying Iranian oil is a win-win situation. It would be good for the Indonesian budget and subsidies, it would be good for our independent foreign policy and in the process it would be good for the Iranian people.

Erwin Wirawan
Jakarta