The country's revenue from the oil and gas sector is still lower than expected mainly on lower oil prices in the first quarter of this year, the Energy and Mineral Resources Ministry reported Monday.
In its written report submitted to the House of Representatives Commission VII overseeing energy and mining, the ministry stated that, up to October this year, the oil and gas sector revenue reached 67 percent of this year's target of Rp 183.6 trillion.
The sector booked Rp 124 trillion (US$13.08 billion) revenue up to October.
"The low revenue realization is caused by the lower oil price early this year. But, we hope the recently increasing oil price can compensate for the lower revenue in the early months of the year," said Evita H. Legowo, director general for oil and gas at the ministry.
She quickly added that the lower revenue had been partly compensated for by the similarly lower government spending on subsidized fuels.
The government subsidizes Premium gasoline, diesel, kerosene, and the 3 kilogram-canister liquefied petroleum gas (LPG).
The ministry's report said that, as of October, the government's spending for on fuel subsidies had reached Rp 33 trillion, or 64 percent of this year fuels subsidy allocation in the 2009 revised state budget.
"The lower expenditure on the subsidies is caused by the lower oil price in the early period of this year and the recent strengthening of the rupiah," the report said.
Fluctuations in oil prices have always presented a dilemma for the country.
The government gets higher revenue from the oil and gas sector when the oil price increasing. But, on the other hand, the increasing oil price increases fuel prices and, as a consequence, increases the cost of government spending on subsidies.
Crude oil for December delivery rose as much as $1.52, or 2 percent, to $78.95 a barrel in electronic trading on the New York Mercantile Exchange, Bloomberg reported Monday.
The crude oil price rose from a one-week low as BP Plc and Chevron Corp. cut output due to Hurricane Ida entered the Gulf of Mexico.
Despite the increasing crude price, Energy and Mineral Resources Minister Darwin Zahedy Saleh said the state budget was still safe.
Darwin said that the increasing oil price was still within planned parameters, because the Indonesia Crude Price (ICP) assumption stipulated in the state budget is still higher than the actual ICP.
"As we know the 2009 revised state budget set the ICP assumption at $61 per barrel. But, the actual ICP average from December 2008 to October 2009 was $56.86 per barrel.
"Therefore, we still have room to anticipate the increasing oil price until the end of the year," Darwin said.