Govt defends crude price assumption for 2003 budget

Minister of Energy and Mineral Resources Purnomo Yusgiantoro on Tuesday defends the government?s assumption to put crude at US$ 20.5 per barrels despite relatively high prices of crude in the market.

?Fundamentally speaking, the world?s oil demand is not increasing in line with supply increase. The current high prices is not a reflection of fundamental factors, but rather non-fundamental factors such as fears of US attacking Iraq and Israel occupying Gaza,? said Purnomo.

?When those non-fundamental factors gone, I think the equilibrium price will be at around $ 20.5 per barrels,? said Purnomo on a side line of parliamentary hearing.

"Crude prices had gone down from $30 in the past week to $ 26 now after those worries eased up," he said.

The government had projected crude lifting of 1.2 million barrels per day in 2003 and exchange rate of Rp.8,700 per US$. Under the assumption, government?s oil and gas revenue in 2003 is estimated at Rp. 46.6 trillion. (alex/godang)