Govt to revise oil price assumption<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
Only two days after delivering the 2006 state budget draft before
\nthe House of Representatives, the government has admitted that
\nits US$40-per-barrel oil price assumption was \"unrealistic\".<\/p>\n
\"Yes, (it is unrealistic). We are open to the possibility that
\nthe oil price assumption will be revised accordingly to the
\nlatest situation,\" head of the Ministry of Finance's Economic,
\nFinancial and International Collaboration Studies Agency, Anggito
\nAbimanyu, said on Thursday.<\/p>\n
At Tuesday's presentation, President Susilo Bambang Yudhoyono
\nacknowledged that the oil price assumption might \"be incompatible
\nwith the current oil price that tends to be very high and may
\nwell be revised in deliberations with the House.\"<\/p>\n
Anggito argued that the government did not solely base the oil
\nprice assumption on current prices -- which hit the $67 barrier
\nrecently -- but also on fiscal prudentiality of the state budget.<\/p>\n
He said it would be better to put the oil price at its current
\nlow assumption and then revise it upwards later on. He added it
\nwould be easier to do so than having to cut already disbursed
\nbudget allocations resulting from a too high oil price
\nassumption.<\/p>\n
\"We do not want to put the assumption at, say, $60 a barrel,
\nbut then end up with oil price averaging at only $53 or $55,\" he
\nsaid.<\/p>\n
\"It will be more difficult to retract the allocations.\"<\/p>\n
The government has earmarked Rp 88.6 trillion (US$8.9 billion)
\nas oil export revenues in the budget draft and Rp 49.3 trillion
\nas revenue sharing to the oil producing regions.<\/p>\n
Anggito said the finance ministry would likely propose to the
\nHouse a revision of the oil price assumption at $45 a barrel.<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
\nsaid earlier the oil price assumption was based on the Indonesian
\nCrude Price, that currently averages between $50 and $55 a
\nbarrel, and will likely average between $40 and $45 next year.<\/p>\n
Separately, economist from the Institute for the Development
\nof Economics and Finance (Indef), Fadhil Hasan, suggested that
\nthe assumption should have ranged between $50 and $60 per barrel.<\/p>\n
\"The $40-a-barrel assumption contradicts the real condition.
\nLocal and international research agencies have predicted that
\nglobal oil prices next year will not decline to an average of $40
\nper barrel,\" he said in a media briefing.<\/p>\n
\"The world's economy will not slow down next year. And oil
\ndemand will remain high as economic growth in India and China is
\nestimated to reach 8 percent,\" he said.<\/p>\n
Fadhil was surprised at President Susilo's state of the nation
\naddress that did not mention the government's plan to lift the
\nfuel subsidy.<\/p>\n
\"If oil price remains at $60 per barrel and the country's oil
\nproduction reaches 1.1 million barrel a day, the fuel subsidy
\nnext year is projected at Rp 123 trillion.<\/p>\n
\"But the budget draft only allocates Rp 68.5 trillion for the
\nsubsidy. What will the government do to address this problem?\" he
\nquestioned, adding that domestic oil consumption would grow by 5
\npercent next year. (006)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-revise-oil-price-assumption-1447893297",
"image": ""
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