Energy Minister Proposes State Budget Plan 2022 to Parliament

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 186.Pers/04/SJI/2021

Date: 2 June 2021

Energy Minister Proposes State Budget Plan 2022 to Parliament

Indonesian Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, submitted the EMR sector's basic assumptions for the state budget plan (Rencana Anggaran Pendapatan dan Belanja Negara, RAPBN) of fiscal year 2022 to Commission VII of House of Representatives of the Republic of Indonesia (DPR RI) in a Work Meeting held on Wednesday (2/6).

The basic assumptions contain the proposed price of Indonesian crude oil (Indonesian Crude Price, ICP), oil and gas lifting quantity, and the volume of subsidized fuels, LPG, and electricity.

The Ministry of EMR proposes an ICP of USD55-65 per barrel in the 2022 RAPBN. This value does not differ much from the realized ICP average during January--May 14, 2021 of USD60.95 per barrel. The 2021 ICP is projected at USD60 per barrel, higher than the price in the State Budget (APBN) which is set at USD45 per barrel.

Arifin added that based on projections from various entities in a poll by Reuters and the US Department of Energy, the world's oil prices in 2022 are estimated to be around USD56.74--64.52 per barrel. Other factors contributing to the dynamics of global oil prices are production cuts by members of OPEC+, stronger fundamentals in the United States and China as well as economic movements and increased oil imports by China.

Next, the oil and gas lifting is proposed at 1.717--1.829 million barrels of oil equivalent per day (boepd), consisting of 686--726 thousand barrels of oil per day (bopd) of oil and 1.031--1.103 million boepd of natural gas. Meanwhile, the realized oil and gas lifting from January to May 20, 2021 is 1.592 million boepd, or 93 percent of the APBN target of 1.712 million boepd. The oil and gas lifting is projected at 1.669 million boepd by the end of 2021.

"After taking into account the current oil price situation, the oil and gas lifting for the 2022 APBN is proposed between 1,717 and 1,829 thousand barrels of oil equivalent per day. The government will continue to urge PSC Contractors to increase their oil and gas production," Arifin said.

For cost recovery, Arifin proposes USD8.65 billion for 2022, slightly above the USD8.07 billion in the 2021 State Budget. The realized cost recovery between January--May 20, 2021 is USD2.28 billion. Cost recovery has been projected to increase to USD8.52 billion by the end of this year.

The volume of subsidized fuels in the 2021 APBN is set at 16.30 million kiloliters (Kl), while the realized volume until May 20, 2021 is 5.61 million Kl. This quantity is projected to increase to 14.79 million Kl in the outlook of fiscal year 2021.

"Taking into account the realization and outlook for 2021, the volume of subsidized fuels is proposed at 14.80--15.58 million Kl in the 2022 RAPBN. This is made up of 0.46--0.48 million Kl of kerosene and 34--15.10 million Kl of Solar diesel oil," explained Arifin.

The government proposes the quota of 3-kilogram LPG of 7.40--7.50 metric tons (MT) in the 2022 RAPBN. The realized volume of 3-kilogram LPG from January to May 2021 is 2.96 million MT. An increase to 7.15 million MT is expected to occur by the end of 2021, below the quota in the 2021 APBN of 7.50 million MT.

The government also proposes a fixed subsidy of Rp500 per liter for diesel oil. Meanwhile, the electricity subsidy is proposed at Rp39.50 trillion if only selected 450 VA and 900 VA household customers are included in the Integrated Social Welfare Database (Data Terpadu Kesejahteraan Sosial, DTKS), and Rp61.83 trillion if all 450 VA and 900 VA household customers are included in DTKS. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

Share This!