Despite the fact that the oil and gas sector’s contribution to state revenues continues to grow on an annual basis, according to a study by research group ReforMiner Institute, approximately 80 percent of these state revenues went to paying for energy subsidies.
“Only around 20 percent of the contribution is used for other needs,” ReforMiner Institute vice director Komaidi Notonegoro said.
According to data from upstream oil and gas authority BPMigas, the oil and gas industry earned US$35.23 billion in sales last year, jumping 32 percent from $26.49 billion in 2010. In 2010, the realization of energy and non-energy subsidies reached Rp 214.1 trillion (US$23.17 billion). The subsidy hit Rp 294.9 trillion in 2011.
The revised 2012 state budget revenue forecast set the subsidy at Rp 265.5 trillion, most of which would be designated for oil fuels.