State budget to be unaffected even oil prices hit $80

State budget to be unaffected even oil prices hit $80

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said
the state budget would remain safe even if oil prices reached up
to US$80 per barrel, with an increase in the current fuel quota
of 10 percent at the most.

Speaking after a Cabinet meeting on Tuesday, he said the
government would have to spend about Rp 110 trillion (US$11.3
billion) to subsidize fuel this year should oil prices stand at
$50 a barrel with a 10 percent increase in the current fuel quota
of 59.6 million kiloliters.

The government will have to allocate Rp 138 trillion and Rp
150 trillion for the fuel subsidy if oil prices soar to $60 and
$80 per barrel, respectively.

At present, the revised state budget allocates Rp 76.5
trillion for the fuel subsidy.

Purnomo also said that President Susilo Bambang Yudhoyono had
ordered state oil and gas company PT Pertamina to provide
sufficient fuel, especially premium gasoline, in a bid to ease
people's concerns over shortages in several areas.

"The President wants Pertamina to provide enough stock for
premium gasoline and drop any plan that forces the public to use
the more expensive fuel, Pertamax gasoline, which is not
subsidized," he said.

Coordinating Minister for the Economy Aburizal Bakrie told The
Jakarta Post after the meeting that the government would consult
the House of Representatives in August to revise the fuel subsidy
allocation to comply with the rising oil prices.

"We are likely to revise again the subsidy allocation. If the
House rejects our proposal, we have to explore other ways to help
offset the rising oil prices and demand as well as the rising
subsidy," he said.

A report from the Ministry of Foreign Affairs revealed that
Indonesia is the country most affected by the skyrocketing oil
prices. -- JP