Media release

Australian Minister for Trade, Mark Vaile

Monday, August 28, 2000

Vaile Discusses High Oil Prices with Indonesia

Trade Minister Mark Vaile has used the opportunity of a meeting with Indonesia's President Wahid in Jakarta today to raise the issue of high international oil prices. Mr Vaile is in Indonesia for discussions with key Indonesian ministers on bilateral and regional trade issues.

Indonesia is an OPEC member responsible for about 5% of OPEC's crude oil production.

"I raised Australia's concern about the impact of high oil prices on the stability of the global economy, through its effect on inflation and global interest rates", Mr Vaile said.

"During the meeting I also encouraged Indonesia to present the case for price stability when it meets with other OPEC members at the forthcoming OPEC Ministers' meeting in Vienna on 10 September."

Mr Vaile said he was mindful of the important role of crude oil in Indonesia's exports and, therefore, its contribution to Indonesia's economic recovery. However, current high oil prices are not sustainable and, if prolonged, are likely to have an adverse impact on the global economy, including Indonesia's. There are therefore compelling benefits for Indonesia, as well as other OPEC members, in achieving more sustainable oil prices.

"The key to more sustainable prices lies in an early decision by OPEC to increase output. Failure by OPEC to do this would incur short-term costs on global consumers, including Australian motorists, and the Government is coordinating with other oil importing countries to encourage prompt action by OPEC."

Mr Vaile will be meeting with key Indonesian Ministers including Vice-President Megawati Soekarnoputri, Trade and Industry Minister, Mr Luhut Panjaitan and Mines and Energy Minister, Dr Purnomo Yusgiantoro, during his two-day visit.