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BUDGET PREPARATION FOR FUEL SUBSIDY NON-TAX Revenue Directorate – Directorate General of Budget

Budget Preparation for Fuel Subsidy

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Page 1: Budget Preparation for Fuel Subsidy

BUDGET PREPARATION FORFUEL SUBSIDY

NON-TAX Revenue Directorate – Directorate General of Budget

Page 2: Budget Preparation for Fuel Subsidy

Fuel Subsidy Policy

Ensure the availability of fuel for domestic use

Reduce the subsidy amount to lessen the burden for state finance by:Adjusting the domestic retail price for fuel per 24 May

2008 close to administered price based on Minister of Energy and Mineral Resources Num.16/2008

Reduce the type of subsidized Fuel from 5 type in 2005 into 3 type only i.e.: diesel oil, kerosene and gasoline while Minyak Diesel and Minyak Bakar is adjusted with market price

Page 3: Budget Preparation for Fuel Subsidy

Fuel Subsidy Policy.. continued

Limitation of subsidized user:Households Small-size IndustriesTraditional FisheriesPublic Transportations Public Services

Continuing Energy conversion, from Gasoline to LPGDistribution of subsidized fuel through closed system

and focusEnergy Sources Diversification i.e: gas, coal,

geothermal, water and fuel from plantsDistribution Cost Efficiency through reduction of

alpha number

Page 4: Budget Preparation for Fuel Subsidy

Determine the Subsidy Cost

1. Cost and Fee2. Public Service Obligation

Page 5: Budget Preparation for Fuel Subsidy

FUEL SUBSIDY MODEL WITH COST AND FEE BASIS

1. Net Revenue from Petroleum• Is the positive difference from net fuel sales less fuel cost

• (Petrol Sales – Petrol Production Cost) > 0

2. Fuel Subsidy• Is the negative difference from net fuel sales les fuel cost

• (Petrol Sales – Petrol Production Cost) < 0

Page 6: Budget Preparation for Fuel Subsidy

FUEL SUBSIDY MODEL WITH COST AND FEE …….continuedMain Component of Fuel Cost and Sales I. Cost of Fuel Supply and Product

1. Crude oil Pro-rate PERTAMINA and Contractor2. Crude oil inkind PERTAMINA and Contractor3. Purchase of Crude oil and gas4. Purchase of Product5. Variation of Crude oil and product stock6. (Reducing Factors) - Non Fuel

II. Operating Cost1. Refinery2. Distribution3. Marine Transportation4. Interest5. General:Head Office6. Depreciation

III. Sales and Self usage of Fuel IV. Fuel Subsidy and or Fuel Net Income

Page 7: Budget Preparation for Fuel Subsidy

Subsidy Calculation

Cost and Fee Scheme

HASIL PENJUALAN

(VOL X HARGA)

HASIL PENJUALAN

(VOL X HARGA)

(dikurangi)

M. TANAH

M. SOLAR

PREMIUM

M. DIESEL

M. BAKAR

BIAYA

BUNGA

MINYAK MENTAH

INKIND

LBM /

(SUBSIDI) BBM

MARGIN

PEMEGANG POMPAPPN PBBKB

KONTRAKTOR

PERTAMINA

KONTRAKTOR

PERTAMINA

BIAYA PENYEDIAAN MINYAK MENTAH DAN PRODUK

BIAYA BBMBIAYA BBM

BIAYA

PENGOLAHAN

BIAYA

DISTRIBUSI

BIAYA

ANGKUTAN LAUT

BIAYA

KANTOR PUSAT

BIAYA

PENYUSUTAN

MINYAK MENTAH

PRORATA

PEMB. M. MENTAH

•IMPOR

•DALAM NEGERI

PEMB. PRODUK

• IMPOR

• DALAM NEGERI

BIAYA OPERASI

STOCK VARIANCE

NILAI PRODUK SURPLUS

(dikurangi/ditambah)

(dikurangi)

Page 8: Budget Preparation for Fuel Subsidy

Determine the Subsidy Cost, based on Public Service Obligation Scheme

Based on the conclusion made in Budget Comitte’s High Level Meeting with Minister of Finance and Bank Indonesia concerning State Budget Proposal and Financial Note for 2006, it is agreed that Start from Fiscal Year 2006, subsidy cost determined by new scheme, to replace the previous cost + fee scheme (based on agreement between government and parliament, Oct 2005)

The new formula, introduced since FY 2006

[(Fuel Retail Price - Tax) – Fuel Benchmark Price] x Projection Consumption Volume

Page 9: Budget Preparation for Fuel Subsidy

Determine the Subsidy Cost, based on

Public Service Obligation SchemeNote :

•Fuel Retail Price is Domestic Retail Price per litre

•Tax includes VAT Motor-Vehicle Tax

•Benchmark Price is Price calculated based on MOPS plus Distribution Cost and Margin

•Benchmark = MOPS + alpha

•Alpha = distribution cost + margin

•MOPS = Mid Oil Platt’s Singapore, Singapore oil fuel market price

Page 10: Budget Preparation for Fuel Subsidy

Parameters in Calculating Fuel Subsidy Within PSO Scheme

1. ICP = Estimation of Indonesian Crude Oil Price

2. Projection of Exchange Rate3. Projection the type and the volume certain

fuel product to be subsidized4. Retail Price for Certain type of Fuel Product

5. α (alpha) = Distribution Cost and Margin

6. Projection of MOPS change/delta

Page 11: Budget Preparation for Fuel Subsidy

DESDMKOMISI VII DPR-RI+

Perkiraan volume BBM yang disubsidi

Jenis BBM yang disubsidi

Perkiraan Volume LPG atau setara volume minyak tanah yang disubstitusi

ke LPG

Harga Minyak Mentah (kisaran)

Depkeu

Bank Indonesia

Bappenas

KOMISI XI

DPR-RI+

Nilai tukar (kisaran)

PemerintahPanitia Anggaran

DPR-RI+

1. Penetapan :

a. Volume dan jenis BBM yang disubsidi serta volume minyak tanah yang disubstitusi ke LPG

b. Harga Minyak Mentah (kisaran)

c. Nilai tukar (kisaran)

2. Besaran alpha BBM (biaya distribusi dan margin) dibahas dalam Panja DESDM yang menyampaikan presentasi

3. Berdasarkan angka 1 dan 2, Departemen ESDM dan Departemen Keuangan membuat perhitungan besarnya perhitungan subsidi BBM

BPH MigasDepkeu

Berdasarkan koordinasi

bersama

SUBSIDI BBM

DIAGRAM PENETAPAN PERKIRAAN SUBSIDI JENIS BBM TERTENTU

Page 12: Budget Preparation for Fuel Subsidy

DIAGRAM OF OIL FUEL SUBSIDY CALCULATION

ICP

CRUDE

Delta MOPS

Biaya

pengolahan

di kilang

Premium

Minyak Tanah

Minyak Solar

Product

Harga Jual Eceran BBM

Konsumen

MOPS

Rumah Tangga dan Usaha

Kecil

Alpha (biaya distribusi dan

margin)

Premium

Minyak Tanah

Minyak Solar

Transportasi, Pelayanan

Umum, Usaha Kecil dan

Usaha Perikanan

Transportasi dan

Pelayanan UmumUsaha

Kecil dan Usaha

Perikanan

Harga Patokan

+

Antara lain : biaya tenaga kerja, depresiasi, bunga,

asuransi, biaya pengangkutan

Page 13: Budget Preparation for Fuel Subsidy

FUEL RETAIL PRICE

Jenis BBM

Harga Jual BBM Lama(Sesuai Perpres No.

55/2005 jo Perpres No. 9/2006)

Harga Jual BBM Baru(Sesuai Permen ESDM

No. 16/2008)

1. Premium *) 4.500 6.000

2. Minyak Tanah **) 2.000 2.500

3. Minyak Solar *) 4.300 5.500

Berlaku sejak tanggal 24 Mei 2008

Pukul 00.00 wib.

*) Termasuk Pajak Pertambahan Nilai (PPN) dan Pajak Bahan Bakar Kendaraan Bermotor (PBBKB) **) Termasuk PPN

Page 14: Budget Preparation for Fuel Subsidy

FUEL AND LNG SUBSIDY CALCULATION FOR FISCAL YEAR 2008 AND

2009No. Keterangan

APBN APBN-P Proyeksi Skenario

Parameter :a. Harga MM Indonesia (US$/bbl) 60,00 95,00 110,00 120,00 b. Nilai Tukar (Rp./US$1) 9.100,00 9.100,00 9.000,00 9.100,00 c. Volume BBM (KL) 35.836.525 35.537.746 35.696.631 38.854.448 - Premium 16.950.000 16.976.292 16.470.000 20.444.354 - Minyak Tanah (Kerosene) 7.886.525 7.561.454 8.526.631 5.804.911 - Minyak Solar 11.000.000 11.000.000 10.700.000 12.605.183

d. Vol. Mitan yg disubstitusi ke LPG (kg) 1.144.019.930 1.144.019.930 286.920.188 1.600.000.000 (setara dengan KL) 2.013.475 2.013.475 503.369 4.000.000 e. Alpha BBM (%) 13,50% 9,00% 9,00% 9.00 (fixed US$100)(dalam Rp. Miliar)

1. Subsidi BBM (17.478,31) (114.646,65) (126.539,07) (133.942,75) a. Premium (3.267,80) (44.048,54) (44.238,67) (56.159,28) b. Minyak Tanah (Kerosene) (10.049,07) (37.949,12) (47.777,51) (34.950,13) c. Minyak Solar (4.161,44) (32.649,00) (34.522,89) (42.833,34)

2. Subsidi LPG (3.721,44) (9.565,27) (2.991,54) (19.285,16)

3. Subsidi BBM dan LPG (1+2) (21.199,75) (124.211,92) (129.530,61) (153.227,91)

4. Kekurangan TA 2007a. Premium - (689,71) (689,71) (689,71) b. Minyak Tanah (Kerosene) - (742,44) (742,44) (742,43) c. Minyak Solar - (1.022,15) (1.022,15) (1.022,15) d. Sub Jumlah (a+b+c) - (2.454,30) (2.454,30) (2.454,29) e. LPG - (149,93) (149,93) - f. Jumlah (d+e) - (2.604,23) (2.604,23) (2.454,29)

5. Jumlah (3+4) (21.199,75) (126.816,15) (132.134,84) (155.682,20)

Catatan :1. Delta MOPS adalah periode Januari s.d Desember 2007.2. Kekurangan subsidi BBM dan LPG TA 2007 secara keseluruhan berjumlah Rp5.058,53 miliar (unaudited). 3. Harga jual B B M s ebagai berikut : 1 J an-23 Mei 2008 24 Mei s .d s ekarang - P remium 4.500,00 6.000,00 - Minyak T anah 2.000,00 2.500,00 - Minyak S olar 4.300,00 5.500,00

20092008

Page 15: Budget Preparation for Fuel Subsidy

FUEL SUBSIDY PATTERN YEAR 2003-2005 ( COST ‘N FEE SCHEME)

No. KeteranganAPBN APBN-P Audit APBN APBN-P Audit APBN APBN-P I APBN-P II Audit

Perhitungan Subsidi BBM(dalam Rp. Miliar)

1. Hasil Penjualan Bersih 76.783,69 76.719,57 76.807,08 78.121,10 78.058,40 84.149,50 79.278,93 98.986,93 139.085,44 2. Jumlah Biaya Pokok BBM 89.993,74 101.231,68 107.673,40 92.648,24 141.141,30 160.923,79 98.279,35 175.501,85 243.862,41 3. Jumlah (Subsidi BBM)/LBM (1-2) (13.210,06) (24.512,11) (30.866,33) (14.527,14) (63.082,90) (76.774,29) (19.000,42) (76.514,92) 89,194.00 *) (104.776,97)

Parameter :

1. Volume penjualan BBM (ribu KL)a. Premium 13.956,86 13.916,94 14.581,54 14.470,91 15.056,00 16.452,58 15.173,45 17.207,22 17.207,22 17.515,25 b. Kerosene 11.841,72 11.750,48 11.800,49 11.577,02 11.594,00 11.936,20 10.503,13 10.476,88 10.476,88 11.403,84 c. Minyak Solar 25.612,20 24.508,90 24.118,66 25.396,40 25.274,00 27.468,06 26.296,18 26.373,36 26.373,36 27.896,44 d. Minyak Diesel 1.645,51 1.467,24 1.271,55 1.395,79 1.345,00 1.222,95 1.296,71 736,63 736,63 1.000,07 e. Minyak Bakar 7.256,02 6.936,35 6.404,57 7.300,00 6.365,00 6.036,31 6.364,87 4.840,28 4.840,28 5.202,13 f. Jumlah 60.312,31 58.579,90 58.176,82 60.140,12 59.634,00 63.116,10 59.634,34 59.634,37 59.634,37 63.017,73

2. Harga MM Indonesia/ICP (US$/bbl) 22,00 27,50 28,77 22,00 36,00 37,58 24,00 45,00 56,58 53,40

3. Nilai Tukar Rp per US$1 9.000 8.500 8.551 a) 8.600 8.900 8.891 8.600 9.300 9.800 9.662 8.424 b)

Catatan :a) Nilai tukar untuk tanggal 1 Januari s.d 16 September 2003b) Nilai tukar untuk tanggal 17 September s.d 31 Desember 2003Hasil audit exclude koreksi tahun lalu.

2003 2004Tahun

2005

Page 16: Budget Preparation for Fuel Subsidy

FUEL SUBSIDY PATTERN YEAR 2006-2008 (PSO SCHEME)

No. KeteranganReal. Pembyr. Audit APBN APBN-P Revisi Real. Pembyr. s.d Perk. Real. APBN APBN-P(Unaudited) Pagu 25 Des (unaudited) (Unaudited)

A. Subsidi BBMa. Premium (9.333,43) (20.966,37) (19.759,07) (12.014,93) (14.528,34) (13.131,18) (26.384,74) (25.287,12) (26.666,54) (7.868,52) (44.738,25) b. Minyak Tanah (29.939,38) (29.984,75) (31.578,69) (34.084,49) (31.209,30) (31.745,14) (40.509,86) (39.450,17) (40.935,04) (24.197,11) (38.691,55) c. Minyak Solar (15.002,87) (13.260,96) (12.874,32) (13.403,42) (14.278,91) (10.163,89) (21.179,73) (19.055,03) (21.099,33) (10.020,30) (33.671,15) d. Jumlah (a+b+c) (54.275,67) (64.212,08) (64.212,08) (59.502,84) (60.016,55) (55.040,21) (88.074,33) (83.792,32) (88.700,91) (42.085,93) (117.100,95)

B. Subsidi LPG (1.821,35) (564,04) (125,91) - (149,93) (3.721,44) (9.715,21)

C. Jumlah (A+B) (54.275,67) (64.212,08) (64.212,08) (59.502,84) (61.837,90) (55.604,25) (88.200,24) (83.792,32) (88.850,84) (45.807,37) (126.816,15)

Parameter :

1. Vol. penjualan BBM (ribu KL)a. Premium 17.080 17.000 16.770 16.807 17.000 16.582 17.645 17.599 17.930 16.950 16.976 b. Kerosene 10.000 9.900 10.014 9.959 8.912 9.591 9.787 9.689 9.852 7.887 7.561 c. Minyak Solar 14.498 11.000 11.037 10.667 11.000 9.858 10.812 10.150 10.884 11.000 11.000 d. Minyak Diesele. Minyak Bakarf. Jumlah 41.578 37.900 37.821 37.433 36.912 36.031 38.244 37.437 38.665 35.837 35.538

2. Vol. Mitan ke LPG (kg) 567.767.000 181.274.250 20.638.836 - 21.498.189 1.144.019.930 1.144.019.930 setara dengan ribu KL 988 319 36 - 38 2.013.475 2.013.475

3. ICP (US$/bbl) 57,00 64,00 63,80 64,26 63,00 60,00 72,59 72,31 72,31 60,00 95,00

4. Nilai Tukar Rp per US$1 9.900 9.300 9.123 9.119 9.300 9.050 9.125 9.093 9.094 9.100 9.100

2008Tahun

20072006APBN APBN-P

Page 17: Budget Preparation for Fuel Subsidy

CHART OF FUEL SUBSIDY AND VOLUME YEAR 2003-2008

-

20.000

40.000

60.000

80.000

100.000

120.000

2003 2004 2005 2006 2007 *) 2008 *)

-

10.000

20.000

30.000

40.000

50.000

60.000

70.000

Nilai Subsidi APBN (Rp. Miliar) Nilai Subsidi APBN-P (Rp. Miliar) Nilai Subsidi Hasil Audit (Rp. Miliar)

Volume BBM APBN (ribu KL) Volume BBM APBN-P (ribu KL) Volume BBM Hasil Audit (ribu KL)

Page 18: Budget Preparation for Fuel Subsidy

PROJECTION FOR OIL FUEL AND LPG SUBSIDY YEAR 2010-2012

(MTEF)(Rp. Miliar)

No. Keterangan

Subsidi BBM1. Premium (45.724,39) (47.448,58) (58.245,28) (60.105,57) (47.574,04) (49.367,98) (60.601,43) (62.536,97) (48.525,52) (50.355,34) (61.813,46) (63.787,71) 2. Minyak Tanah (22.990,93) (23.339,18) (25.294,62) (25.667,92) (13.421,82) (13.625,13) (14.766,69) (14.984,62) (4.173,05) (4.236,26) (4.591,19) (4.658,95) 3. Minyak Solar (42.562,80) (43.720,04) (50.293,98) (51.535,25) (44.265,31) (45.468,83) (52.305,74) (53.596,66) (46.921,23) (48.196,97) (55.444,08) (56.812,46) 4. Jumlah (1+2+3) (111.278,12) (114.507,80) (133.833,89) (137.308,74) (105.261,17) (108.461,94) (127.673,86) (131.118,25) (99.619,80) (102.788,57) (121.848,74) (125.259,12)

5. Subsidi LPG Tabung 3 Kg (21.710,45) (22.021,29) (25.055,92) (25.403,12) (27.917,95) (28.317,67) (32.219,96) (32.666,44) (34.125,45) (34.614,04) (39.384,01) (39.929,75)

6. Jumlah (4+5) (132.988,57) (136.529,09) (158.889,81) (162.711,86) (133.179,13) (136.779,61) (159.893,82) (163.784,68) (133.745,26) (137.402,61) (161.232,74) (165.188,87)

7. Kekurangan Tahun 2009 (1.500,00) (1.500,00) (1.500,00) (1.500,00)

8. Jumlah (6+7) (134.488,57) (138.029,09) (160.389,81) (164.211,86) (133.179,13) (136.779,61) (159.893,82) (163.784,68) (133.745,26) (137.402,61) (161.232,74) (165.188,87)

Parameter :a. Harga MM Indonesia (US$/bbl) 110,00 110,00 120,00 120,00 110,00 110,00 120,00 120,00 110,00 110,00 120,00 120,00 b. Nilai Tukar (Rp./US$1) 9.200 9.300 9.200 9.300 9.200 9.300 9.200 9.300 9.200 9.300 9.200 9.300 c. Volume BBM (KL) 38.982.255 38.982.255 38.982.255 38.982.255 38.734.972 38.734.972 38.734.972 38.734.972 38.417.395 38.417.395 38.417.395 38.417.395 - Premium 21.639.372 21.639.372 21.639.372 21.639.372 22.514.733 22.514.733 22.514.733 22.514.733 22.965.028 22.965.028 22.965.028 22.965.028 - Minyak Tanah (Kerosene) 3.981.389 3.981.389 3.981.389 3.981.389 2.324.286 2.324.286 2.324.286 2.324.286 722.656 722.656 722.656 722.656 - Minyak Solar 13.361.494 13.361.494 13.361.494 13.361.494 13.895.953 13.895.953 13.895.953 13.895.953 14.729.711 14.729.711 14.729.711 14.729.711

d. Vol. Mitan yg disubstitusi ke LPG (kg) 2.240.652.000 2.240.652.000 2.240.652.000 2.240.652.000 2.881.304.000 2.881.304.000 2.881.304.000 2.881.304.000 3.521.956.000 3.521.956.000 3.521.956.000 3.521.956.000 (setara dengan KL) 5.601.630 5.601.630 5.601.630 5.601.630 7.203.260 7.203.260 7.203.260 7.203.260 8.804.890 8.804.890 8.804.890 8.804.890 e. Besaran alpha (%) 9,00 9,00 9,00 9,00 9,00 9,00 9,00 9,00 9,00 9,00 9,00 9,00

20122010 2011

Page 19: Budget Preparation for Fuel Subsidy

Fuel Volume Basis for 2010-2012 (MTEF)2010Estimation of fuel consumption for APBN calculation = 38.982.255

KL (kilo liter), with details as follows:1. Gasoline (Premium) : 21.639.372 KL2. Kerosene : 3.981.389 KL3. Diesel Oil : 13.361.494 KL

Assumptions: Growth Elasticity projected to be 0,9% (DG Oil and Gas) Estimated economic growth 6,5% - 6,7% (DG Oil and Gas) Estimated Inflation 5,5% - 6% (DG Oil and Gas) Indonesian Crude Price (ICP) = US$ 110 - 120/barrel (DG Oil and Gas) Estimated exchange rate Rp 9.200,-/US$ - Rp. 9.300,-/US$ (DG Oil and Gas) Conversion of Kerosene to LPG = 1.601.630 KL (PT PERTAMINA)- Control card from Inquiries of Subsidized Fuel Consumers in 2008 in 102 districs/cities

approximately 277.365 with saving assumption of 19% (cencus in 2007) (BPH Migas)

Page 20: Budget Preparation for Fuel Subsidy

WITH ASSUMPTIONS…(continued):

Gasoline (Premium)

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities growth estimated to

be 6%

• As an impact of non-subsidized gasoline retail price increase, there’s a consumers usage shifting to a subsidized gasoline

• Increasing demand for gasoline due to public holidays

• Increasing usage of portable electricity generator, and other non-motor-vehicles

Kerosene

•Conversion from Kerosene to LPG for household approximately 1.601.630 families

• Closed Distribution Monitoring System using control card in year 2010 estimated to be 83.210 families or around

30%

Diesel Oil

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities, growth estimated to

be 6%

• As an impact of non-subsidized gasoline retail price increase, there’s a tendency that industry and mining transportation will

use diesel oil

• Increasing demand for diesel oil due to public holidays

• Increasing sales in gas stations due to retail diesel oil usage

Page 21: Budget Preparation for Fuel Subsidy

Fuel Volume Basis for 2010-2012

2011

Estimation of fuel consumption for APBN calculation = 38.734.972 KL (kilo liter), with details as follows:

1. Gasoline (Premium) : 22.514.733 KL

2. Kerosene : 2.324.286 KL

3. Diesel Oil : 13.895.953 KL

Assumptions:

Growth Elasticity projected to be 0,8% (DG Oil and Gas)

Estimated economic growth 6,7% - 6,9% (DG Oil and Gas)

Estimated Inflation 5% - 5,5% (DG Oil and Gas)

Indonesian Crude Price (ICP) = US$ 110 - 120/barrel (DG Oil and Gas)

Estimated exchange rate Rp 9.200,-/US$ - Rp. 9.300,-/US$ (DG Oil and Gas)

Conversion of Kerosene to LPG = 1.601.630 KL (PT PERTAMINA)

-Control card from Inquiries of Subsidized Fuel Consumers in 2008 in 102 districs/cities approximately

277.365 with saving assumption of 19% (cencus in 2007) (BPH Migas)

Page 22: Budget Preparation for Fuel Subsidy

WITH ASSUMPTIONS…(continued):

Gasoline (Premium)

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities growth estimated to

be 4%

• As an impact of non-subsidized gasoline retail price increase, there’s a consumers usage shifting to a subsidized gasoline

• Increasing demand for gasoline due to public holidays

• Increasing usage of portable electricity generator, and other non-motor-vehicles

Kerosene

•Conversion from Kerosene to LPG for household approximately 1.601.630 families

• Closed Distribution Monitoring System using control card in year 2011 estimated to be 55.473 families or around 20%

Diesel Oil

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities, growth estimated to

be 4%

• As an impact of non-subsidized gasoline retail price increase, there’s a tendency that industry and mining transportation will

use diesel oil

• Increasing demand for diesel oil due to public holidays

• Increasing sales in gas stations due to retail diesel oil usage

Page 23: Budget Preparation for Fuel Subsidy

Fuel Volume Basis for 2010-2012

2012

Estimation of fuel consumption for APBN calculation = 38.417.394 KL (kilo liter), with details as follows:

1. Gasoline (Premium) : 22.965.028 KL

2. Kerosene : 722.656 KL

3. Diesel Oil : 14.729.711 KL

Assumptions:

Growth Elasticity projected to be 0,7% (DG Oil and Gas)

Estimated economic growth 6,9% - 7,1% (DG Oil and Gas)

Estimated Inflation 5% - 5,5% (DG Oil and Gas)

Indonesian Crude Price (ICP) = US$ 110 - 120/barrel (DG Oil and Gas)

Estimated exchange rate Rp 9.200,-/US$ - Rp. 9.300,-/US$ (DG Oil and Gas)

Conversion of Kerosene to LPG = 1.601.630 KL (PT PERTAMINA)

-Control card from Inquiries of Subsidized Fuel Consumers in 2008 in 102 districs/cities approximately

277.365 with saving assumption of 19% (cencus in 2007) (BPH Migas)

Page 24: Budget Preparation for Fuel Subsidy

WITH ASSUMPTIONS…(continued):

Gasoline (Premium)

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities growth estimated to

be 2%

• As an impact of non-subsidized gasoline retail price increase, there’s a consumers usage shifting to a subsidized gasoline

• Increasing demand for gasoline due to public holidays

• Increasing usage of portable electricity generator, and other non-motor-vehicles

Kerosene

•Conversion from Kerosene to LPG for household approximately 1.601.630 families

Diesel Oil

• Transportation Sector growth, due to increasing automobile & motorcycle sales and economic activities, growth estimated to

be 6%

• As an impact of non-subsidized gasoline retail price increase, there’s a tendency that industry and mining transportation will

use diesel oil

• Increasing demand for diesel oil due to public holidays

• Increasing sales in gas stations due to retail diesel oil usage

Page 25: Budget Preparation for Fuel Subsidy

THANK YOU