Jakarta – The government added subsidies and energy compensation after the spike in world oil prices caused PT Pertamina to suffer a deficit in their operating cash flow as high as USD 2.44 billion, Ministry of Finance officials said in a statement Friday (20/5).
The price of Indonesian crude oil (ICP) has recently soared from the previous assumption of US$ 63 per barrel in the 2022 State Budget to USD 100 per barrel. This causes subsidies and energy compensation to increase as well. Pertamina has had to bear the difference between the retail selling price of fuel oil and the economic price since January.
Minister of Finance Sri Mulyani said, to support Pertamina, the government would cover the difference that occurred due to the spike in world oil prices. The additional budget allocation for energy subsidies and compensation throughout 2022 is set at IDR 291 trillion (USD 19.9 billion), or from IDR 152.5 trillion (USD 10.4 billion) to IDR 443.6 trillion (USD 30.3 billion).
“If there is no additional revenue from the government, then by December 2022 Pertamina’s operating cash flow will be in a deficit of USD 12.98 billion,” Sri Mulyani explained.
She said that Pertamina’s declining financial ratios since early this year has the potential to lower the company’s credit rating and later on also impact the government’s credit rating. (Hartatik)
Banner photo: Minister of Finance Sri Mulyani Indrawati speaking in the S20 Webinar entitled ‘High Level Policy Webinar on Just Energy Transition’ in Jakarta, Thursday (17/3). (Photo: Hartatik)
