What are the details of the macroeconomic assumptions for the energy sector in the 2022 State Budget?

The Ministry of Energy and Mineral Resources (ESDM) and Commission VII of the House of Representatives (DPR) agreed on the macroeconomic assumptions for the energy sector in the 2022 State Budget (RAPBN) on Thursday, June 10, 2021. These assumptions include an Indonesian Crude Price (ICP) of US$55-70 per barrel.

The cost recovery assumption is set at US$8.5-9 billion. The agreed-upon subsidy for diesel fuel is Rp 500 per liter. Meanwhile, the electricity subsidy is estimated to reach Rp 39.5-61.83 trillion.

Furthermore, the agreed-upon oil and gas lifting is recorded at 1.73-1.95 million barrels per day. This comprises oil lifting of 705-750 thousand barrels per day and natural gas lifting of 1.031-1.2 million barrels per day.

The volume of subsidized fuel is set at 14.8-15.58 million kiloliters, consisting of kerosene at 0.46-0.48 million kiloliters and diesel fuel at 14.34-15.1 million kiloliters. The volume of subsidized 3 kg LPG is 7.5-8 million metric tons.

In addition to the macroeconomic assumptions, the two institutions agreed on a budget of Rp 6.89 trillion for the Ministry of ESDM in 2022. This amount is an increase from the previous indicative budget ceiling of Rp 5.04 trillion.