REPUBLIKA.CO.ID, JAKARTA - The government and the House of Representatives have agreed to raise the country's oil production target to 900,000 barrels per day from 845,000 barrels set in the original draft budget.
The increase could potentially mean an addition of 11 trillion IDR a year to state revenues before cost recovery, according to caretaker head of the Fiscal Policy Body of the Finance Ministry Andin Hadiyanto.
"Cost recovery is yet to be recalculated . The cost is higher with oil wells getting older. I will have to ask for the data form the SKK Migas (Upstream Oil and Gas Regulator)," Hadiyanto said on Monday.
He said, the finance ministry would recalculate additional revenues to be set in the revised draft state budget because of the change in projection in the original draft budget for 2015. In addition to additional income form an increase in oil production, the government is set to optimize tax revenue, contribution from state companies.
Tax revenues are expected to increase by 9 trillion IDR and contribution from state companies to rise by 3 trillion IDR. State revenues, therefore, would be larger than originally set in the original draft budget, with no much change in spending, Hadiyanto said.
Deficit, therefore was expected to narrow although state expenditures were yet to be recalculated and discussed at the parliament, he added.
The target for total state revenues in the 2015 draft state budget is set at 1,762.3 trillion IDR consisting of 1,370.8 trillion IDR in taxes, 388 trillion IDR in non taxes, 3.4 trillion IDR in grants.
State expenditure target is set at 2,019.9 trillion IDR broken down into spending by the central government at 1,379.9 trillion IDR and transfers to the regional administrations at 640 trillion IDR. The deficit, therefore, is projected at 257.6 trillion IDR or 2.32 percent of the country's GDP.
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