VIVAnews - The government will submit IDR2.2 trillion worth of proposed fund to be allocated to oil and gas debts repayment, to local governments.
This would be the third payment following the ones in 2009 and 2010. Each payment was worth IDR2 trillion.
Finance Minister Sri Mulyani Indrawati said the debts occurred to oil and gas-producing local governments because there was an anomaly in the world’s crude oil prices due to the high oil price of US$140 per barrel, which went beyond what the 2008 State Budget was assumed.
“Because it was too high, we were IDR10 trillion short,” Mulyani said during her speech at the second National Meeting of Oil & Gas Producing Regions Consultation Forum at the JW Marriot Hotel in Jakarta on Thursday, February 25.
Therefore, the government will propose IDR2.2 trillion of additional funds to the government to be included in the 2010 Revised State Budget in March. That would make a total amount of IDR4.2 trillion in the debt repayment.
However, the repayment entirely depends on the 2010 Revised State Budget’s fiscal space. If possible, the government will put in the additional funds and if it is not, the payment will be a priority in 2011.
The government has promised that the payment will be in the form of revenue sharing that will be paid to each of the regions.
Mulyani expects local governments to understand the situation because the amount of oil and gas revenues was not as targeted. It all happened because the lifting figures and the exchange rates were far from the expectation.
“According to our calculation, Non-Tax State Revenue is worth IDR124 trillion and the Income Tax is IDR40 trillion. But, the non-tax state revenue was calculated based on the amount of lifting with the oil price of US$60 per barrel and IDR10 thousand of exchange rate. The reality is that the oil price is above US$ 60 per barrel and the lifting is below the target of 880 thousand barrels per day with only IDR9200 of exchange rate. So, it will be different than the one agreed in the State Budget Laws, “she said.
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Translated by: Nataya Ermanti
