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Higher oil price to boost state revenue, increase subsidies
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Energy and Mineral Resources Minister Ignasius Jonan (Antara/Akbar Nugroho Gumay)
T
he increase of the global crude oil price has changed Indonesia’s outlook for revenue and subsidies, estimated to grow 50 percent to Rp 240 trillion (US$16 billion) and Rp 148 trillion, respectively by the end of this year.
The government set its Indonesian Crude Price (ICP) for August at $69.36 per barrel, while the global oil price reached $78 per barrel for Brent crude on Monday.
Energy and Mineral Resources Minister Ignasius Jonan said he expected to reap Rp 200 trillion from the oil and gas sector and Rp 40.6 trillion from the mineral and coal sector.
“But as global oil prices rise, subsidies must also rise,” he said.
Jonan explained the subsidy for Solar-branded diesel fuel was expected to reach Rp 29 trillion, or more than 300 percent higher than the figure in the 2018 state budget of Rp 7 trillion. Meanwhile, the subsidy for kerosene will increase by 63 percent to Rp 3.6 trillion.
Jonan further said positive coal exports could also ease the oil and gas trade deficit, which in August reached US$1.6 billion, or 36 percent higher than the figure in July of $1.2 billion.
Previously, the ministry opened a chance for coal exporters to add 100 million tons in 2018 in an effort to boost exports.
“With the assumption of the coal price at $60 per ton and if we add 100 million tons, we could get $6 billion. That will cover our low oil and gas trade deficit,” he said. (bbn)
