Windfall profit from oil and gas will be used to help small people

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said that the windfall profit resulting from the better than expected of oil and gas prices should be used to help the poor people, Kompas reported on Saturday.

"We are still counting the actual amount of the windfall profit although some have estimated that the amount can reach Rp 6 trillion," he was quoted as saying following his a limited cabinet meeting. Purnomo said that he had proposed in the meeting to use the windfall profit from gas and oil sales be allocated for projects that will directly help the poor people.

Oil and gas analyst Kartubi estimated that the higher than expected crude oil prices in the international market may bring in a windfall profit of at least Rp 6 trillion to the government?s coffers. The windfall could be even higher because state revenues from oil and gas also include the receipts from the sales from liquefied natural gas (LNG) in which the price is also based on the crude price level in the international market, he said.

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 of Rp 9,000 per U.S. dollar. The average crude oil price in the international market, however, reached about US$25 per barrel in 2002. This has resulted in the increase by the state revenues from oil and gas by eight percent from the initial target or about Rp 6 trillion. (*)