The increase in world crude oil prices is considered sufficient to affect the business continuity of textile and textile product (TPT) industry players. Referring to Bloomberg data, the price of West Texas Intermediate (WTI) oil has penetrated US$ 121.95 per barrel on Tuesday (8/3) at 16.30 WIB. Meanwhile, the price of Brent oil was at the level of US$ 125.93 per barrel at the same time. Secretary General of the Indonesian Filament Yarn and Fiber Producers Association (APSyFI) Redma Gita Wirawasta said the portion of fuel costs in the textile industry actually varies. In the upstream sector, the share of fuel to total production costs is in the range of 25-27%.

While downstream, the share of fuel costs to total production costs is at the level of 8%-10%.

"On paper, this increase in oil prices will certainly have an impact on the garment industry," said Redma in a virtual press conference, Tuesday (8/3).

One of the effects of the increase in oil prices is on the competitiveness of the garment industry. Especially in dealing with the import of garment products which are usually priced cheaply.

Redma gave an example of Bangladesh which can produce garment products at competitive prices. This is quite helpful because the price of industrial gas there is only around US$ 4 per MMBTU. Not to mention, gas energy is also used for electricity for the garment industry in Bangladesh, so that business actors there are able to reduce energy costs to become cheaper.

“The gas price for the upstream textile sector is already US$ 6 per MMBTU. However, downstream is still US$ 9 per MMBTU even though the usage is not as much as the upstream sector," he said.

Deputy Chairperson of the Indonesian Textile Association (API) David Leonardi added that the increase was not only in crude oil, but also in the prices of other energy commodities such as coal.

This condition can add pressure to garment industry players, both in the upstream and downstream sectors. Garment manufacturers also cannot freely adjust the selling price of their products because they have to be able to compete with imported products and the purchasing power of the people has not fully recovered.

"Purchasing power in the community has not really improved even though it is now close to the Eid moment," said David.