Revenue target from oil and gas raised

The Jakarta Post, Jakarta

The government and the House of Representatives' budget committee agreed on Monday to raise the revenue target from oil and gas and other natural resources in the 2003 state budget draft from Rp 62.1 trillion (around US$6.8 billion) to Rp 70.97 trillion.

Chairman of the committee Abdullah Zainie said on Monday that the positive revision reflected the higher world oil prices expected for next year.

"The higher target is based on an estimated increase in income tax for the government from oil and gas, which was made possible after we made revision on the oil price," Zainie was quoted by Antara as saying.

The government and the House last week revised almost all of the assumptions for next year's draft, first presented to the legislators in August, to take into account the economic impacts arising from the Bali bombings and the latest developments globally.

Among other things, the government increased the oil target price from the initial price of $20.5 to $22 per barrel, while the oil production target remained at 1.27 million barrels per day.

Under the August draft budget, the government targeted Rp 12.55 trillion in income tax revenue from oil and gas and a total of Rp 49.59 trillion in non-tax revenue from oil and gas and other natural resource-based industries, including mining, forestry and fishery. From the oil and gas sector alone, non-tax revenue was set at Rp 33.1 trillion.

Under the revised budget, income tax revenue from oil and gas is set at Rp 14.77 trillion, while non-tax revenue from oil and gas and other natural resources is set at Rp 56.19 trillion.

In the meeting, director of state-owned oil and gas company Pertamina Baihaki Hakim said that he projected the company's dividend for the government for next year to be higher as well because of the revised oil price.

"After some adjustments, we have calculated that Pertamina can generate some Rp 2.338 trillion in revenue for the government in 2003, instead of the previous projection of Rp 1.5 trillion," Baihaki told the meeting.