State revenue from oil, gas projected to shrink by half on oil drop

The government?s revenue from oil and gas in the 2016 state budget is estimated to drop by more than half compared to original assumption amid the current oil drop, Bisnis Indonesia reported on Monday.

The paper quoted Deputy for Financial Control at upstream authority SKK Migas Parulian Sihotang as saying that based on the recent discussion with the Ministry of Finance, the new oil price assumption in the proposed revision of the 2016 state budget is set at US$35 per barrel, down from $50 per barrel under the original budget assumption.

The lower oil price assumption would consequently translate to a more than 50 percent drop in the government revenue to $5 billion (including non-tax and income tax revenue) from the original target of $11.7 billion. (*)