Jakarta (Platts)--1May2008

The Indonesian government will sell half of the 14 million barrels of
crude oil in the country's oil storage facilities in a bid to increase
revenues amid the skyrocketing oil prices, a senior official said Thursday.
"We have crude oil storage in many areas, including in Sumatra and
Kalimantan. Our storage levels are very high now, therefore we want to sell
half of the 14 million barrels that we have," the chairman of upstream
regulator BPMigas R. Priyono said.
He said that the crude oil would be sold at the Indonesian Crude Price,
which was around $103/barrel for April.
Indonesia is facing a serious budgetary crisis due to skyrocketing oil
prices, as the government subsidizes the prices of kerosene, gasoline and
gasoil for the public.
The government had initially set aside a fuel subsidy allocation of
Rupiah 45.8 trillion ($5 billion) in the 2008 budget. But in the revised 2008
budget, the fuel subsidies allocation was increased to Rupiah 126 trillion.
Separately, the government is considering raising fuel prices from June,
Indonesia's oil minister Purnomo Yusgiantoro said.
Indonesia, an OPEC member, has seen its crude output fall because of
natural declines. It missed its 2007 target for oil and condensate output of
950,000 b/d, pumping only 910,000 b/d. It also failed to meet the output
target of 1.050 million b/d in 2006 by producing only 1.007 million b/d.