Oil and gas receipts exceed initial target by 8 percent: Minister Purnomo

Although the oil production for the year 2002 did not meet the initial projection, receipts from oil and gas exceeded the target by Rp 5.76 trillion or by eight percent higher thanks to better than expected crude oil prices in the international market, Suara Karya reported on Thursday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Wednesday that the government expected to receive a windfall profit of about Rp 5.76 trillion or about eight percent above the target made in the 2002 stage budget.

The government projected to receive about Rp 72 trillion in the 2002 stage budget. The target is based on the assumption that the price of crude oil will reach an average of US$22 per barrel, the total oil production would reach 1.32 million barrels per day, and the average exchange rate of the rupiah is Rp 9,000 per U.S. dollar.

Purnomo said although the daily oil production was about 90,000 barrels lower than the target due to a decline in the production of the Coastal Plain Pekanbaru (CPP) oil field in Riau, the overall oil and gas receipts exceeded the target thanks to the better than expected oil prices which averaged at about US$24 per barrel during the year.

No more fuel subsidy

Minister Purnomo also said in 2003 that the government would totally removed fuel subsidy except for kerosene sold to households in line with the 1999 national development plan law which stipulated that the fuel subsidy should be stopped by 2004.

In order to meet the target, the minister said, the fuel prices except those for the kerosene sold to households would be gradually set equal to prices in the international market. The government is still preparing the ideal level of the ceiling and floor prices of the fuel products for 2003 as the bases for the gradual removal of the fuel subsidy.

According to the minister said that 2003 ceiling and floor price formula would be the same with those introduced this year. "The difference is that the 2002 price is still about 75 percent of the actual fuel prices in the international market while in 2003, prices of all fuels would be 100 percent of the prices available in the international market. (*)