Indonesia to change ICP formula

Government may move to alter Indonesian Crude Price (ICP) formula starting June this year to minimize discrepancy with other pricing formula, a government official said as quoted by Kompas daily.

I Wayan Suryana, a Director at the Minsitry of Energy and Mineral Resources said Indonesia would scrap Asian Petroleum Price Index (APPI) from ICP formula and would only use Platts and RIM Intelligence Co. with equal weight of 50 percent each.

Currently ICP uses Platts and RIM with equal weight of 47.7 percent each and APPI at 5 percent.

Wayan said that APPI usage tended to suppress ICP as ICP members who submitted data are mostly traders, who wanted to see lower prices. He said the new formula has potency to increase state revenue.

He, however, said that the new ICP formula must first get approval from Minister of Energy and Mineral Resources. (*)