Indonesian crude oil set for the 2023 State Budget and Expenditure Draft has increased by 5 U.S. dollars per barrel from the previous proposal of 90 dollars per barrel.

Jakarta (Indonesia Window) – The basic assumption of the Indonesian Crude Price (ICP) for the 2023 State Budget and Expenditure Draft (RAPBN) is 95 U.S. dollars per barrel, higher than that in the 2022 state budget of 63 dollars per barrel.

This has been approved by Minister of Energy and Mineral Resources Arifin Tasrif and Commission VII (dealing with energy, research and technology, and environment) of the Indonesian House of Representatives, according to an official statement from the Ministry of Energy and Mineral Resources received here on Monday.

The ICP set for the 2023 RAPBN also increased by 5 dollars per barrel from the previous proposal of 90 dollars per barrel as informed by Indonesian President Joko Widodo when delivering a speech on the State Budget for Fiscal Year 2023 and its Financial Note at the Plenary Meeting with the House on Aug. 16, 2022.

"In principle, the government has approved (to fix the ICP price)," said Arifin during a meeting with the House in Jakarta on Thursday (Sept. 8).

Arifin emphasized that the global market instability due to geopolitical tensions has pushed world oil prices to fluctuate. "The current conditions, both in terms of demand and world oil prices, have no certainty as they change every day," he said.

The determination of the basic assumption of the ICP at the level of 95 dollars per barrel, Arifin continued, aims to anticipate the increase in world oil consumption at the end of the year ahead of the winter season and disruption of supply from Russia.

On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) and its partners, the group known as OPEC+, are also controlling the pace of production in order to contain world oil prices.

"Even if there is a decline in oil prices, there are indications of inflation, so that demand would also fall," the minister noted.

Reporting by Indonesia Window