United States (US) West Texas Index (WTI) crude prices slipped into negative territory for the first time ever over storage capacity constraints after COVID-19 hit the demand - Photo: Special

JAKARTA (TheInsiderStories) – Energy and mineral resources (EMR) ministry stated that the trade war between the United States and China affected the average Indonesian Crude Price (ICP) in August 2019. The ministry set ICP US$57.26 per barrel or lowered US$4.05 compared to previous month at $61.32 a barrel.

The ministry also reported, last July, world crude oil supply rose 230,000 barrels oil per day (bpd) to 98.71 million bpd compared to June, triggered by increased production from non-Organization of the Petroleum Exporting Countries (OPEC) countries.

The International Energy Agency (IEA) also reported the increase in commercial crude oil stock in emerging countries was 31.8 million barrels in July 2019 compared to the previous month. This output was 66.9 million barrels higher than the average of the last five years.

For the Asia Pacific region, the decline in crude oil prices was not only caused by these factors, but also was affected by the decreasing in Japanese crude oil imports by 265,000 bpd (9 percent) to 2.8 million bpd and India by 340,000 bpd (8 percent) to 4.1 million bpd.

Another factor, the slowdown in the Indian economy have occurred due to a declining in interest rates by 0.35 basis points the Bank of India in August 2019.

In this year, Indonesian Crude Price pegged at $70 a barrel following the dynamics of world oil prices. This figures higher compared to the 2018 State Budget at $48 a barrel,

Oil and gas lifting is set at 2,025 thousand barrels of oil equivalent per day, consisting of oil lifting 775 barrels per day (bpd) and natural gas lifting 1,250 million standard cubic feed per day (MMSCFD).

Compared to the 2018 State Budget, the number of assumption on oil lifting fell by 25 bpd while the gas rose by 50 MMSCFD. Furthermore, the replacement of oil and gas operating costs (cost recovery) is set as much as $10 billion.

Both parties also agreed to lowered the volume of subsidized fuel to 15.11 million kiloliters (KL), divided into kerosene 610,000 KL and diesel 14.50 million KL. While the volume of three kilogram of LPG is set to rise to 6.978 million tons from 2018 only 6.450 million tons.

Fixed subsidies for diesel oil also experienced a change of Rp2,000 per liter from the previous year Rp500 a liter. As for electricity subsidies, it was approved to be Rp57.67 trillion.

Written by Marcel Gual, Email: theinsiderstories@gmail.com