Economy & Business

Government Acknowledges Unrealistic Oil Price Assumption
Friday, 19 August, 2005 | 23:22 WIB

TEMPO Interactive, Jakarta:The Indonesian government has acknowledged that several groups considered the oil price assumption in the 2006 State Budget to be unrealistic.

“Indeed,” said Anggito Abimanyu, Chairman of the Economic Review Board at the Ministry of Finance, in Jakarta on Thursday (18/08).

“Mr SBY (President Susilo Bambang Yudhoyono, ed.) also acknowledged that the assumption was unrealistic.”

According to Abimanyu, the assumption was set in June this year because this is when the government must hand over the macro assumptions for next year.

At that time, international oil prices were between US$45 and US$55 per barrel.

Therefore, the government has opened the opportunity for assumption changes, which shall be adjusted to the current situation.

Determining the oil price, Abimanyu said, must be carried out carefully so that the assumption would not be set too high while the realization of this price must be lower than usual.

“It would be difficult to cut the budget,” he stated.

Abimanyu himself estimates that a realistic oil price for next year would be US$45 per barrel.

“I will suggest this to the House of Representatives (DPR),” he stated.

The proposal for this change will result in an increase in the state budget.

However, Abimanyu added, this increase will not affect the economic growth rate of 6.2 percent. (Suryani Ika Sari-Tempo News Room)