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2023 ICP hiked to US$95 per barrel amid uncertain global oil demand
The government says the ICP set for next year takes into account the prospects of a spike in world oil consumption during the winter as well as disrupted supplies from Russia.
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The oil-and-gas rig in the Offshore North West Java (ONWJ) Block shown in this undated photo is operated by state-owned oil-and-gas company Pertamina. (SKK Migas/Handout)
T
he government has increased its projected oil price for next year by hiking the Indonesian Crude Price (ICP) to US$95 per barrel from the initial plan in the 2023 state-budget draft of $90 per barrel, as it expects global oil demand to remain strong and supply to remain restricted.
The 2023 ICP is far above last year's ICP projection of $63 per barrel for the 2022 state budget.
Energy and Mineral Resources Minister Arifin Tasrif explained that global market instability due to geopolitical tension had led to fluctuation in global oil prices. Setting the ICP at $95 per barrel anticipates a spike in world consumption during the winter season as well as a disruption of oil supply from Russia.
"The conditions regarding both demand and world oil prices are uncertain; they change every day," he explained during a working meeting with House of Representatives Commission VII on Thursday, as quoted in a ministerial press release on Friday.
"Even if there is a decline in oil prices, demand will fall, because there are indications of inflation," said Arifin, implying that concern about the economy would make consumers more cautious about spending.
The government and House are targeting oil-and-gas lifting (ready to sell) in 2023 to be at 1.76 million barrels of oil equivalent per day (BOEPD), consisting of oil lifting at 660,000 BOEPD and natural-gas lifting at 1.1 million BOEPD.
This decision was agreed on by policymakers on the bases of 2022 oil-and-gas lifting of 1.56 million BOEPD as of August, namely 606,400 BOEPD of oil and 956,000 BOEPD of gas.
