Makalah : The Rising of Oil Prices and Its Impact

The Rising of Oil Prices and Its Impact

To complete the English Task

                                                           

Arranged by :

Name             :   Dwi Putri S.

Class              :   XII NS 7

Absent           :   10

UPTD SMA NEGERI 1 SLAWI

Jl. KH. Wahid Hasim No.1 Slawi, Telp. 0283 491164

CHAPTER I

1.1  Background

Indonesia is one of the developing country with great population. Welfare of populations have not event out yet and still consider  centralistic. The result of observation show that there are 57,02% poor populations 38,6% is slightly above the poverty line, and there are only about      people who fulfilled their welfare.

Poverty problem is a topic which will be not completed until the current debate and now this problem continue to be endless problems. Various control programs did not change the poverty number in Indonesia significantly. One of cause the increasing poverty numbers in Indonesia is rising oil prices. Some people considered that rising oil prices is a process of mass impoverishment of people. Because the increasing of rising oil price is followed by increasing the price of other goods, automaticaly majority people become poorer because of  increased live costs ,meanwhile a steady income. Therefore, the problem of sustainable oil price increases which is continue  need to be handled properly and wisely.

1.2  The Reasons of The Theme

Author choose the theme about The Rising Oil Price and Its Impact because this is a topic which is not ending debate. Because of  the impact the rising oil prices affect economies in Indonesia. One of impact caused by rising oil prices about the poverty which has been target of development since the early independence of the nation. The nation of  Indonesia has had great attention to the creation  of  a fair and prosperous society.

Development implemented during these also give great attention to poverty alleviation effort undertaken since the construction essentially aimed to improving welfare . Because of rising oil prices affect the poverty rate in Indonesia, the author want to review the topic of rising oil prices and its impact.

1.3  Objective

The objective of  author write this topic are:

1.)          To know the condition of oil price in Indonesia

2.)          To know opinion of Indonesian people about the rising of oil prices

3.)          To know the impact of the rising oil prices

CHAPTER II

2.1 Discussion

Recently, oil prices soared so high that caused panic Indonesian people, especially mother. . This will depend on world oil prices. Economic observer analysts predict oil prices will continue to rise. This is proved the world oil prices penetrating USD 90,07 per barrel, the highest figure in history. This figure is expected by some economic observers to rise, not even impossible to break the psychological $ 100 per barrel. Rising oil prices will certainly reap the public controversy.

The increase in global oil prices will actually benefit the government because there will be an increase in net revenue that can be allocated to others need. An increase in average oil price of USD 10 per barrel would increase the surplus ( net revenue ) amounted to Rp 3 trillion government.

Rising oil price will make a society of motor vehicle users attempt to economically and minimized to reduce motor vehicle usage. In addition to cultivate the attitude of thrift, it will reduce congestion and pollution that occurs.
People would think to look for alternative energy sources are cheaper, so don’tbe too dependent on oil. So that the continuity of our children and grandchildren to be more secure because don’t depend on oil.

Besides our country was not too burdened with fuel subsidies that are too big. If world oil prices rise, the government will rise domestic prices because the stock is not sufficient. Instead of overseas oil smuggling that would be harmful us.

As mentioned above, the rising oil prices will reap a lot of controversy. Most of people are harmed by the rising of oil prices, and only a few people who get richer due to rising of oil prices.

The rising of oil prices is a process of mass impoverishment of Indonesian people by the government. With the increase of oil prices followed by increasing the prices of other goods, so that most people become poorer. Allegedly strong increase of oil prices has led to increased poverty in the country about 2% from previous number. And according to the World Bank there are 60% pr 132 million people the number of poor people. This is fantastic number which is very alarming.

When the government make policies to raise the price of oil didn’t consider people as key stakeholder. The motive is economic oil prices with world prices and market standard, assumption budget (Revenue Expenditure Budget) alone. In this case the factor of social reality didn’t be the basis consideration in government’s policy plans. Though oil prices were very costly social life on Indonesian society.

The concern is not the arrival of the compensation fund from rising oil prices to the hand who deserve it. Predict by many observer to be happening again what is called “Tradition of corruption”. This is quite reasonable because the mental corruption of Indonesian people is still high relatively.

The impact of higher oil prices will make domestic prices with international disparity increase. As a result, increased incentives for smuggling. 

The government should immediately prepare a soft landing strategy the economy from the impact of oil prices. The initial steps should be initiated is to tighten the administration and supervision of  the oil lifting rates, both for local and international players. Do not let us missed again as had happened in late 2005, when there were large number of emblezzlement of oil by rogue elements in one of pertamina’s offshore oil wells in Borneo.

Therefore, the rising of oil price is considered unethical. Even the accusation that the government appears less creative in finding an alternative solution to the budget deficit. Yet outside of the rising oil price there is still a better alternative, such as eradicating corruption in a serious and continuous, and apply the tax on luxury goods. In addition, although the government provide compensation fund or BLT to offset rising oil prices, but this government policy will make Indonesian people into a society of passive and lazy. Because they are given cash money without working.

So the rising of oil prices contributed to increasing poverty. Between the positive and negative impact of increasing oil prices is not balanced, although there are positive impacts but not commensurate with the impact posed by rising of oil prices.

CHAPTER 3

3.1 Conclusion

Based on the description that has been the authors describe, it can be deduced as follows:
1.)   Rising oil prices a State depends on the increase in world oil prices
2.)   Rising oil prices sparked controversy both among the top or bottom
3.)   Positive impact of oil price increases are:

a.       Build an automobile user community will seek to economically reduce motor vehicle usage. So congestion was reduced

b.      People are starting to look for alternative energy sources are cheaper

c.       Our country is  not too burdened with fuels subsidies that are too big.

4.)      Negative impact due increasing oil prices:

a.       Make people become poorer because or the rising of oil prices followed by the rising of other goods, but fixed income

b.      Make disparity with the international and domestic prices increase, thus increasing the incentive to smuggle.

c.       Compensation fund from the oil price increase does not reach the hands of people who deserve it

3.2 Suggestion

Although oil prices in Indonesia are adjusted with world oil prices, the government of Indonesia should have own benchmark price adjusted for economic conditions in Indonesia. Especially according to observation by economic observer , the number of poor people in Indonesia more than half of total population in Indonesia. So that the expected increase in oil prices does not increase the burden on people, especially people who are under the welfare lines and also does not increase the poverty rate in Indonesia.