JAKARTA, 28 August 2005 - President Susilo Bambang Yudhoyonoofficially inaugurated a new oil refinery in Balongan, Indramayu, West Java province on Sunday. The Langit Biru refinery will boost the country's oil production in order to reduce the country's dependence on importedfuel, official news agency Antara reported. Susilo said that the refinery could also help save the state budget from rocketing oil prices on the international market.

The President said that if the country had to rely solely on imported fuel, the cost of the subsidy would continued to soar. "The higher the oil price (internationally), the higher the cost of the subsidy and the heavier the country's burden," he said. He said that with current oil prices, the cost of the subsidy had reached 140 trillion rupiahs (about 14 billion US dollars), more than a quarter of this year's total state budget.

After the inauguration, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the Langit Biru refinery could save the budget about 580 million US dollars per year. The plant could refine 52,000 barrels of oil per day, he said. State oil and gas company Pertamina has nine refineries, with atotal capacity of about one million barrels a day.

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