Tito Summa Siahaan, Jakarta – Legislators are making life difficult for the next administration by rewriting the draft state budget and inserting assumptions that many will dismiss as shooting for the moon.
A meeting between members of the House of Representatives' Commission VII, overseeing energy affairs, and officials of the Energy and Mineral Resources Ministry on Monday led to a number of changes in some of the main components of the budget assumptions.
The oil lifting assumption was increased to 900,000 barrels per day from 845,000 barrels per day, while the subsidized fuel quota was reduced to 47 million kiloliters from 48.6 million kiloliters.
Both assumptions will present a difficult challenge, considering the present situation. Lawmakers also decided to put the Rp 72.42 trillion electricity subsidy on hold pending further deliberation.
Oil output was only 788,000 barrels per day as of July this year, while consumption of subsidized fuel is poised to surpass the 46 million kiloliters quota set in the revised 2014 state budget.
Government officials appeared to be powerless to yield to legislators' demands and lost for words when asked whether the new assumptions can be achieved. Chief economics minister Chairul Tanjung led the meeting as the interim energy and mineral resources minister.
Johanes Widjonarko, head of upstream oil and gas regulator SKKMigas, said that the 845,000 barrels per day of oil output presented in the draft budget was based on the projected 18 percent decline rate and the average oil output of 119,000 barrels per day from the development of the Cepu block in East Java.
Satya Wira Yudha, a legislator from the Golkar Party, questioned the 18 percent decline rate presented in the budget assumptions. "If the decline rate is kept at 5 percent, the output would not be 845,000 barrels per day," he said.
Effendi Simbolon, a legislator from the Indonesian Democratic Party of Struggle (PDI-P), which won this year's election, blamed ExxonMobil, the operator of the Banyu Urip field, for failing to get Indonesia's to achieve higher output. "They keep making excuses for delays. Something must be done to them," he said.
Legislators lowered the subsidized fuel quota to 47 million kiloliters which, according to Andy Noorsaman Sommeng, the chief of downstream regulator BPHMigas, was unrealistic without a price increase. He said that the 48.6-million-kiloliter subsidized fuel quota was based on growth in gross domestic product which in turn led to an increase in vehicle sales.
"We cannot go against growth," Andy said, adding that the 48.6-million-kiloliter quota was based a on business-as-usual scenario.