Oil Lifting will Boost State Revenue, Ministry says
19 September 2014 15:22 WIB
TEMPO.CO, Jakarta – Andin Hadiyanto, chief executive of the Finance Ministry's fiscal policy office, estimated the state revenue would grow by up to Rp2 trillion for every 10,000-barrel increase in oil lifting. This figure does not take into account the cost recoveries, which will go up along with any increase in oil lifting.
"The number must be discussed again in the House of Representatives' (DPR) Budgetary Board," he said in Jakarta yesterday.
Andin is optimistic that this year's oil lifting increase will help the government narrow the budget deficit to less than 2.3 percent of the GDP.
In the basic macro assumptions stipulated in the 2015 State Budget Draft, oil lifting target was pegged at 845,000 barrels per day (bpd). On Monday, the government and the DPR Energy Commission agreed to raise the target to 900,000 bpd.
Meanwhile, the Finance Ministry calculated that an increase of up to 82,000 barrels next year will provide an additional Rp8.2 trillion to the state revenue.
Lana Soelistianingsih, an economist with the University of Indonesia, recommends the government to stop relying on oil lifting to increase state revenue because every year oil lifting achievement is never on target. "There is no certainty in oil lifting," she said.
However, SKK Migas chief Johannes Widjonarko believes that this year's oil lifting target will be met. One way to ensure the target is achieved is speeding up last year's projects, for example by advancing the cultivation schedule from 2016 to 2015.
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