Tuban refinery project may be funded by state budget: Minister

State Minister for National Development Planning Sri Mulyani Indrawati has emphasized the need to make a reality of the state owned oil and gas company PT Pertamina’s plan to build an oil refinery in Tuban, East Java.

The funds for the project will possibly be taken from the state budget, especially by diverting some of the money allocated for fuel subsidy. The remaining amount will come from the investors.

“The government can fund the project if the state budget is revised. It can be done, but we need (to resolve) the fundamental issue. The subsidy has become a basic issue. But the amount (subsidy) can be reallocated to some other projects,” Sri Mulyani said in Jakarta after attending a seminar on the “Strategic Steps for Economic Recovery” on Wednesday.

The government, according to the minister, is very serious in the realization of the project to boost oil production at home especially at a time when global oil prices are hovering around US$60 per barrel level. Moreover, the government is also talking with potential domestic as well as foreign investors.

“ During several Cabinet sessions on energy policy, we had already established an energy coordination body, which has several ministers on its board to discuss more technicalities of the project,” Sri Mulyani said.

Earlier, Pertamina said it would build a US$1 billion oil refinery, which will have a capacity of between 150,000 to 200,000 barrels per day, to meet the growing fuel demand. (dino)