Indonesia Raises Global Oil Price Projection

Indonesia raises global oil price projection

JAKARTA, Sept. 27 (Xinhua) — The Indonesian government and the House of Representatives agreed Tuesday to increase global oil price projection to 57 US dollars per barrel from initial government proposal of 50 dollars.

The oil price is one of major assumptions used to form the state budget.

“It’s less likely that global oil prices will drop to below 60 dollars per barrel but on the other hand, we cannot set the price too high and therefore we decided to assume oil price at 67 dollars per barrel,” House working committee head Amin Said Husni said at the parliament compound here.

Oil price assumption is a crucial element in the budget as it determines deficit in the budget and the amount of government fuel subsidy, which is estimated to soar to 113 trillion rupiah (11.3 billion dollars) this year.

The government and the House also agreed to set growth at 6.1 percent next year, the average rupiah exchange rate at 9,900 to the US dollar and national oil production at 1.11 million barrels per day.

Earlier government proposals on the draft budget have got wide criticism for being unrealistic and irrelevant to global economic situation. The rupiah, for instance, was initially set at 9,400 per dollar although in markets the local currency has been hovering around 10,000 against the greenback over the last few months.

Amin said the draft budget must be completed before Oct. 31 as the law requires that the draft budget should be ready two months before the new fiscal year.