Minister Lowers Oil Price Assumption To Us$30-40 Per Barrel

Jakarta (Antara Bali) - Finance Minister Bambang Brodjonegoro has lowered the Indonesian crude oil price (ICP) assumption to US$30-40 per barrel in the 2016 State Budget's draft due to the recent fall in oil prices in the global market.

"We will see whether it is 30 or 40 (US$ per barrel)," the minister stated here on Wednesday (January 27).

The recent fall in oil prices would definitely lower the state's revenue, especially from the oil and gas production.

State revenues from the oil and gas sector, include Income Tax (VAT) of oil and gas, oil and gas non-tax state revenues, and other non-tax revenues from upstream activities. The decrease in the state's revenue will also have an impact on government spending.

However, Bambang was still reluctant to ascertain how the fiscal posture will decline due to the drop in global oil prices.

"Definitely down (state's revenue from oil and gas sector), but then we must calculate first," the minister noted.

 Bambang confirmed that the government will submit the draft of the 2016 state budget to the parliament and will target to complete the budget discussion in the first quarter of 2016.

The change in the state's revenue posture is also awaiting the ratification of the Tax Amnesty bill, which is believed to increase the state revenue from within and outside the country.

The state's total revenue in the 2016 state budget is targeted at Rp1,822.5 trillion, with spending valued at Rp2,095.7 trillion.

According to the budget's macro assumptions, the decline in global oil prices will have an impact on the ICP assumption and the lifting of oil and gas.

In the 2016 Budget, the ICP assumption was set at US$50 per barrel, while oil and gas lifting was set at 830 thousand barrels per day. (WDY)