Besiege and occupy the State Palace on May 21 and
June 1
National Liberation Front Statement - May 13, 2008
The battle drum of the Indonesian people’s
resistance to the planned fuel price increases has
been sounded -- students, the urban poor, workers,
farmers and women in every corner of the country are
daily holding actions that are growing and uniting
day by day. This indicates that the people’s
standard of living has declined to an intolerable
level and that the Indonesian people are not
prepared to accept the government’s plan to increase
fuel prices by 30 percent.
The antiquated arguments being put forward by the
government, the House of Representatives, the
political elite and the hired intellectual pundits
are all the same -- the rise in world oil prices,
which has reached US$120 per barrel or 1,116,000
rupiah per barrel or 7,018 rupiah per litre, has
resulted in an increase in fuel subsides to as much
as 21.4 trillion rupiah. The state meanwhile, does
not have the budget to cover this, so like it or
not, the cost of domestic fuel must be increased in
line with the international prices.
What they never explain however is that why
international fuel prices are tending to rise? And
why must domestic fuel prices follow international
fuel prices?
The reasons for the rise in world fuel prices:
1. The reason that is most often reported is the
decline in supply from oil producing countries,
either because of upheavals (such as Iraq or
Nigeria), the decline in oil reserves (such as
Indonesia) or because the governments and people in
particular countries are in the process of
nationalising international oil companies (as is
occurring in Venezuela), while energy demand
continues to increase, both in the imperialist
countries (the US requires 20.59 million barrels per
day, Japan 5.22 million barrel per day and Russia
3.10 million barrels per day) as well as in
countries where there is rapid economic growth (such
as India which requires 2.53 million barrels per day
and China at 7.27 million barrels per day), even
though there is no evidence to indicated that the
world’s oil industries are unable to meet this
demand.
2. The real reason -- and this is rarely reported on
-- is oil speculation on international share
markets. As is the case with other shares, oil share
traders are extremely vulnerable to speculation, and
it is this that is in fact triggering the increases
in international fuel prices.
The real reasons for increasing Indonesian fuel
prices:
1. The price of fuel in Indonesia always follows
world prices because the majority of oil and gas
companies in Indonesia are controlled by foreign
capital (the owners of national oil industries) so
that oil produced by Indonesia is prioritised for
sale in international markets, and even if it has to
be sold in Indonesia, then its price is the same as
the international price of fuel (which they also
determine).
2. What is sold domestically is limited to only 15
percent of total production, and this is also why
the government has to buy fuel at international
prices, when in fact these foreign companies should
be obliged to supply this -- and it should not just
be 15 percent -- but more. After all, this is oil
taken from our own soil.
3. Indonesia does not have the industrial capacity
to refine crude oil into fuel, so the fuel that we
use on a daily basis must be purchased from other
countries. Put simply, we have large reserves of
crude oil (although it is controlled by foreigners,
only a small percentage is controlled by the state-
owned oil company Pertamina) that is taken overseas
to be processed, they we buy it back at the
international price. This is why the price of
domestic fuel always follows international prices.
4. What adds further to these high prices is that
the purchase and sale of this oil is done through
brokers, so it is even more expensive again when it
is sold back to the people. The profit on the
importation of a barrel of oil is as much as 30
percent, so with our total imports reaching 113
million barrel per year, the brokers’ profit is
US$170 million or 1.6 trillion rupiah. While for
exported oil the brokers’ profit is US$2 per barrel.
So with a daily export of 490,000 barrels, the money
going into the brokers’ pockets is 9.3 billion
rupiah per day or 3.3 trillion rupiah per year.
5. Worse still, all of the costs born by these
foreign companies in drilling for crude oil (from
the initial survey to production) are fully (100
percent, moreover it has now reached 120 percent
because there is an additional 20 percent for
companies that develop oil wells that have
previously been processed) paid for by the
government (with of course the people’s money, which
comes from taxes and so forth), which is usually
referred to as “cost recovery”.
Conclusion:
1. So even though the Indonesian nation has at least
329 blocks or sources of oil and gas covering an
area of 95 million hectares (half of Indonesia’s
land area) with estimated oil reserves of as much as
250-300 billion barrels (equivalent to Saudi Arabia
which is currently the largest oil producer in the
world) with total daily crude oil production
reaching 1 million barrel or 159 million litres per
day, it does not benefit the people of Indonesia.
2. With the capacity to produce 1 million barrels of
crude oil per day, at the current price of US$120
per barrel this translates into 1.104 trillion
rupiah per day or 397.44 trillion per year. This
does not yet include the value of gas sales, which
are enormous, reaching 82.8 trillion rupiah per
year. If all of the oil industries were controlled
by a pro-people state, then there would be no state
budget deficit as a result of the increase in world
fuel prices (the budget deficit of 21.4 trillion
rupiah is well below the profit of 397.44 trillion
from oil and 82.8 trillion from gas).
3. Not to mention the fact that the state does not
have to spend such excessive amounts on cost
recovery. As of mid-2007 alone, the government spent
93.9 trillion rupiah on cost recovery.
4. The benefits for the people would increase if
Indonesia could process its own crude oil, without
having to send it overseas for processing, and then
buy it back again. Just imagine, 4.9 trillion rupiah
per year is wasted on brokers (export and import).
5. Now compare this with the direct cash assistance
(BLT) for the poor which only amounts to 14 trillion
over six months for millions of people, which in
real terms translates into only 100,000 rupiah a
month or 3,000 rupiah per day for each of these
millions of people. If domestic fuel prices are
increased, this will not even be enough to
compensate for increases to public transport costs.
Why is the Indonesian nation, which is rich and
large, colonised by foreign capital?
1. Because all of the political forces in Indonesia
(the parties of Suharto’s New Order regime, the
military, the fake reform parties, the fake
nationalist parties and the parties that act in the
name of religion but leave their religious
communities to be colonised) are cowards in the face
of international capital, who have moreover by
acclamation supported the enactment of laws and
regulations that allow international capital to
plunder Indonesia’s natural wealth including our oil
(the latest being the law on capital investment and
its derivatives) and to exploit our labour. Although
the Indonesian Democratic Party of Struggle (PDI-P),
the National Awakening Party (PKB), the Justice and
Prosperity Party (PKS) or the speaker of the House
of Representatives who is from the Golkar Party are
currently opposing the fuel price increases, this is
only as a means to boost their popularity in the
upcoming 2009 general elections. This is also the
case with the old political elite figures that are
now on the political margins, which are busy
proclaiming their opposition. There are none who are
actually prepared to oppose the colonisation by
foreign capital like Fidel Castro in Cuba, Hugo
Chavez in Venezuela, Evo Maorales in Bolivia or
Indonesia’s founding President Sukarno in Indonesia.
2. Because the intellectuals (economic and political
observers, university rectors and lecturers) are
also cowards. Moreover there are many who are even
prepared to be paid by international capital, the
government or by other means to support these
colonialist programs (by providing research funds,
scholarships, facilities and the like).
3. Domestic companies also have the same mentality
as the political elite, not resisting the domination
of international capital, but instead becoming the
agents of international capital. Even now
organisations such as the Indonesian Chamber of
Commerce and Industry (Kadin) and the Indonesian
Employers Association (Apindo) are vehemently
supporting the fuel price increases.
4. The principle force that is capable of
confronting international capital -- the working
class and the poor -- have yet to demonstrate their
real strength in the form of nationwide
mobilisations and by uniting the movement
organisations.
The solution for the Indonesian people:
1. Take over all oil and gas and other vital
industries in Indonesia under the control of the
people;
2. Repudiate the foreign debt;
3. Cooperate with the governments and people of
Venezuela and Bolivia to develop refineries and the
oil industry;
4. Diversify energy sources in order to guarantee
environmental sustainability;
5. Push aside the capitalist class, the elite and
the political parties that deceive the people, build
the people’s own power.
Short-term solutions:
1. Cancel the planned fuel price hikes and bring
down prices;
2. Seize the assets of former President Suharto and
his cronies and monies embezzled through the
Indonesian Bank Liquidity Support scheme;
3. Cut the wages of government officials at the
national to the sub-district level by 30 percent;
4. Cut the wages of executives at private companies
by 50 percent;
5. Place limits on private capital by means of
restricting the capital ownership, increasing tax on
private cars, increasing parking fees and so forth;
6. Apply a 35 percent tax on the profits from export
and import of oil.
A call to unite in opposition:
1. Hold daily mass actions, everywhere, by means of
factory strikes, road blocks, occupying government
offices and mass actions in the streets to thwart
the fuel price hikes;
2. Unite the student’s actions with the people’s
actions, make the campuses a place to consolidate
the people’s mass struggle;
3. Hold a nation wide action simultaneously on May
21 and June 1, besiege and occupy the centres of
power. In Jakarta, let’s besiege and occupy the
State Place;
4. Unite and build the people’s movement resisting
colonialism nationally as an embryo of a new
people’s government.
- Besiege and occupy the State Palace on May 21 and
June 1
- Thwart the planned fuel price hikes by uniting the
people’s mobilisations
- Take over the oil and gas industries by people’s
mobilisations under the control of the people
- Push aside the capitalist class, the political
elite and the political parties that deceive the
people. It is time for the people to take power
National Liberation Front
Jakarta, May 13, 2008
General Secretariat: Jl. Pori Raya No 06 RT009/RW
010
Pisangan Timur, Jakarta Timur
Phone/Fax: 021 4757881
Email: pembebasan.nasional@gmail.com
The National Liberation Front (Front Pembebasan
Nasional, FPN):
BPI, the Coalition of People Against Eviction
(PAWANG), the Coalition of the People Arising to
Resist (Korban), the Commission for Missing Persons
and Victims of Violence (Kontras), the Indonesia
Legal Aid and Human Rights Association (PBHI), the
Indonesian Association of the Families of Missing
Persons (Ikohi), the Indonesian Buskers Union (SPI),
the Indonesian Forum for the Environment (Walhi),
the Indonesian Student Secretariat (SMI), the
Institute for Public Research and Advocacy (Elsam),
the Institute of Global Justice (IGJ), the Jakarta
Legal Aid Foundation (LBH), JGM, JKB, the Agrarian
Reform Consortium (KPA), LPBH FAS, Movement
(Pergerakan), the National Transport Workers
Federation (FBTN), Free Women (Perempuan Mahardika),
the Politics for the Poor-Indonesian Student League
for Democracy (LMND-PRM), the Poor People's Alliance
(ARM), the Poor Peoples Political Union (PPRM),
Praxis, SIEKAP, SPEED, SPP, VHR, the Workers
Challenge Alliance (ABM), the Working People's
Association (PRP).
[Translated by James Balowski.INDOLEFT News Service]