TEMPO.CO, Jakarta - The government has set the estimate of Indonesian crude price at US$50 per barrel at a working meeting with the Commission VII of the House of Representatives here on Thursday, September 17.
"The estimate of Indonesian crude price is US$50 a barrel," Chief of the House Commission VII Kardaya Warnika said at a working meeting with the Energy and Mineral Resources Ministry to discuss macro assumptions in the draft 2016 state budget.
At the meeting Energy and Mineral Resources Minister Sudirman Said proposed the estimate of Indonesian crude price at US$50-55 per barrel.
However, all factions in the House of Representatives including the Indonesian Democratic Party of Struggle (PDIP), the Great Indonesia Movement Party (Gerindra), the National Democrat (Nasdem) and the Prosperous Justice Party (PKS) factions agreed to set the estimate of Indonesian crude price at US$50 a barrel.
Quoting the results of a study conducted by the Finance Ministry, Said said any US$1 decline in the Indonesian crude price will reduce state receipts by Rp1 trillion.
"If the decline reaches US$10 a barrel the state receipts will fall by Rp30 trillion," he said.
He said the government had better adopt the realistic price and make adjustments in the state budget in case of a decline in Indonesian crude price.
"We propose US$50 per barrel that we consider more realistic according to the current condition," he said.
He said among the fundamental factors that will affect the development of oil prices in 2016 are the global economic slowdown particularly in main oil consuming countries including the US and China, and oversupply in the global oil market.
The oil oversupply will be the result of the increasing shell oil production in the US and rising crude oil supplies from Iran, he said.