Energy Ministry to propose revision to oil assumption

Amahl S. Azwar, The Jakarta Post, Jakarta | Headlines | Thu, May 02 2013, 10:01 AM
The Energy and Mineral Resources Ministry is planning to propose amendments to the macroeconomic assumptions in the 2013 State Budget, including the Indonesian Crude Price (ICP), oil lifting and subsidized fuel quota, a top official has said.

Deputy Energy and Mineral Resources Minister Susilo Siswoutomo told reporters in Jakarta on Monday that his office would propose the revision once the House of Representatives’ recess period ended
on May 15.

The plan is in line with President Susilo Bambang Yudhoyono’s statement earlier this week on the fuel price increase scheme, which will be announced once the government and lawmakers finish discussing the revised 2013 State Budget.

“One of the revisions that we will be proposed is to lower this year’s daily average crude oil production from the current target of 900,000 barrel per day [bpd],” he said at the ministry’s headquarters in Jakarta.

Earlier this year, the country’s upstream oil and gas interim watchdog, SKKMigas, proposed for the crude oil production target this year to be lowered to around 840,000 bpd amid dwindling oil output due to the maturation of existing oil fields.

Commenting on this, Susilo said the government would propose for the lifting target to be set to a range between 830,000 bpd and 850,000 bpd, citing that “it is the most realistic target given the current situation”.

In the first three months in this year, Indonesia, a former sole Southeast Asian member with the Organization of the Petroleum Exporting Countries (OPEC), sees its average oil lifting to 830,900 bpd.

In addition, Susilo added, the government would alter the ICP assumption — a variable to determine state revenue from the oil sector — to a range between US$100 and $110 per barrel from the previous macroeconomic assumption of $100 per barrel.

The country saw its average crude oil price decline to $107.42 per barrel as of March this year, down by 7 percent from $114.86 per barrel in February. However, according to Susilo, the possibility of a global economic recovery has prompted the government to set the current ICP target.

As previously reported by The Jakarta Post, the government plans to increase the subsidized fuel price in a single price policy after weeks of considering the implementation of a dual price policy.

Susilo said the government would alter the subsidized fuel quota from the current quota set in the 2013 State Budget of 46 million kiloliters to 48 million kiloliters under the assumption that the fuel price was increased from the current Rp 4,500 per liter to Rp 6,500 per liter.

“Without the new fuel price, the quota might reach 53 million kiloliter [an 8 million kiloliter increase from the 45 million kiloliters consumed throughout 2012], he said.

In the January-March period this year, subsidized fuel consumption reached 11.03 million kiloliters, nearly surpassing the 11.09 million kiloliter quota.


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