Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances
Indonesia's oil revenues and fuel subsidies dominate the nation's economic policy agenda. This paper estimates the impact of higher international oil prices on the Indonesian government's fiscal position in 2008 and beyond. It analyz...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/09/9847980/black-hole-or-black-gold-impact-oil-gas-prices-indonesias-public-finances http://hdl.handle.net/10986/6993 |
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okr-10986-6993 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ALTERNATIVE FUELS ANECDOTAL EVIDENCE APPROACH AUTOMOTIVE DIESEL AVERAGE PRICE AVERAGE PRICES BALANCE BANK ACCOUNTS BARREL BARREL OF OIL BARRELS PER DAY BORDER PRICE BUDGETING CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITAL STOCK CARBON CARBON EMISSIONS CASH FLOWS CHEMICAL COMPOSITION COMPETITIVENESS CONSUMPTION OF FUEL CONSUMPTION OF PETROLEUM CONTRACTUAL OBLIGATION CORPORATE INCOME TAX COST OF GASOLINE CRUDE OIL CRUDE OIL EXPORTS CRUDE OIL PRICE CRUDE OIL PRICES CRUDE OIL PRODUCTION CRUDE OILS CRUDE PRICE CRUDE PRODUCTION DEBTS DECENTRALIZATION DERIVATIVES DEVELOPING COUNTRIES DIESEL DIESEL CONSUMPTION DIESEL OIL DOMESTIC FUEL DOMESTIC MARKET DOMESTIC PETROLEUM DOMESTIC REFINING EI ELECTRICITY ELECTRICITY PRICE ENERGY ECONOMICS ENERGY PRICES ENERGY PRODUCERS ENERGY PRODUCTION ENERGY PRODUCTS EXCHANGE RATE EXPENDITURE EXPENDITURES EXTRACTION FINANCIAL MANAGEMENT FISCAL DECENTRALIZATION FOREIGN CURRENCY FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL OIL FUEL PRICE FUEL PRICES FUEL PRODUCTS FUEL TYPE FUEL TYPES FUELS GAS GAS EXPORTS GAS FIELDS GAS LAW GAS OUTPUT GAS PRICES GAS PRODUCTION GAS RESERVES GAS SUBSIDY GASOLINE GASOLINE CONSUMPTION GASOLINE DEMAND GASOLINE PRICES GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REGULATION GOVERNMENT REVENUE GOVERNMENT REVENUES HIGHER ENERGY CONSUMPTION HIGHER GAS HIGHER OIL PRICES HUMAN CAPITAL IMPLICIT SUBSIDY INCOME LEVEL INCOME LEVELS INCOME TAX INFLATIONARY PRESSURES INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL MARKET INTERNATIONAL OIL PRICES KEROSENE KEROSENE CONSUMPTION MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MARKET PRICE MARKET PRICES MARKET SUPPLY MILLION BARRELS MINERAL MINERAL RESOURCES MONETARY FUND NATURAL GAS NATURAL RESOURCES NET OIL OIL OIL & GAS OIL AND GAS OIL COMPANY OIL EXPORTER OIL EXPORTS OIL IMPORTER OIL IMPORTS OIL PRICE FLUCTUATIONS OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RECOVERY OIL RESERVES OIL REVENUES OIL SECTOR OILS OPPORTUNITY COST PACIFIC REGION PERCENT OF PRODUCTION PERSONAL INCOME PETROL PETROLEUM PRICES PETROLEUM PRODUCT PRICES PETROLEUM PRODUCTS POWER PRICE BENCHMARK PRICE CHANGES PRICE ELASTICITY PRICE INCREASE PRICE INCREASES PRICE LEVEL PRICE LIBERALIZATION PRICE MOVEMENTS PRICE OF OIL PRICE SUBSIDIES PRICE SUBSIDY PRICING MECHANISM PRIVATE CONTRACTORS PRIVATE INVESTORS PRODUCTION LEVEL PRODUCTION SHARING CONTRACTS PRODUCTS MARKET PROVEN RESERVES PUBLIC FINANCES PURCHASING PURCHASING POWER REFINED PRODUCTS REFINERIES RESERVE RETAIL RETAIL PRICE RETAIL PRICES RETURNS ROYALTY RULE OF LAW SAFETY NET SALE SALES SMALL BUSINESSES STREAM SUBSTITUTE SUBSTITUTE PRODUCT SUBSTITUTE PRODUCTS SUPPLY COST TAX OBLIGATIONS TAX RATE TAX REVENUE TAX REVENUES TRANCHE TREASURY VOLATILITY WHOLESALE PRICE WORLD CRUDE WORLD ENERGY WORLD OIL WORLD OIL PRICES |
| spellingShingle |
ACCOUNTING ALTERNATIVE FUELS ANECDOTAL EVIDENCE APPROACH AUTOMOTIVE DIESEL AVERAGE PRICE AVERAGE PRICES BALANCE BANK ACCOUNTS BARREL BARREL OF OIL BARRELS PER DAY BORDER PRICE BUDGETING CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITAL STOCK CARBON CARBON EMISSIONS CASH FLOWS CHEMICAL COMPOSITION COMPETITIVENESS CONSUMPTION OF FUEL CONSUMPTION OF PETROLEUM CONTRACTUAL OBLIGATION CORPORATE INCOME TAX COST OF GASOLINE CRUDE OIL CRUDE OIL EXPORTS CRUDE OIL PRICE CRUDE OIL PRICES CRUDE OIL PRODUCTION CRUDE OILS CRUDE PRICE CRUDE PRODUCTION DEBTS DECENTRALIZATION DERIVATIVES DEVELOPING COUNTRIES DIESEL DIESEL CONSUMPTION DIESEL OIL DOMESTIC FUEL DOMESTIC MARKET DOMESTIC PETROLEUM DOMESTIC REFINING EI ELECTRICITY ELECTRICITY PRICE ENERGY ECONOMICS ENERGY PRICES ENERGY PRODUCERS ENERGY PRODUCTION ENERGY PRODUCTS EXCHANGE RATE EXPENDITURE EXPENDITURES EXTRACTION FINANCIAL MANAGEMENT FISCAL DECENTRALIZATION FOREIGN CURRENCY FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL OIL FUEL PRICE FUEL PRICES FUEL PRODUCTS FUEL TYPE FUEL TYPES FUELS GAS GAS EXPORTS GAS FIELDS GAS LAW GAS OUTPUT GAS PRICES GAS PRODUCTION GAS RESERVES GAS SUBSIDY GASOLINE GASOLINE CONSUMPTION GASOLINE DEMAND GASOLINE PRICES GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REGULATION GOVERNMENT REVENUE GOVERNMENT REVENUES HIGHER ENERGY CONSUMPTION HIGHER GAS HIGHER OIL PRICES HUMAN CAPITAL IMPLICIT SUBSIDY INCOME LEVEL INCOME LEVELS INCOME TAX INFLATIONARY PRESSURES INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL MARKET INTERNATIONAL OIL PRICES KEROSENE KEROSENE CONSUMPTION MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MARKET PRICE MARKET PRICES MARKET SUPPLY MILLION BARRELS MINERAL MINERAL RESOURCES MONETARY FUND NATURAL GAS NATURAL RESOURCES NET OIL OIL OIL & GAS OIL AND GAS OIL COMPANY OIL EXPORTER OIL EXPORTS OIL IMPORTER OIL IMPORTS OIL PRICE FLUCTUATIONS OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RECOVERY OIL RESERVES OIL REVENUES OIL SECTOR OILS OPPORTUNITY COST PACIFIC REGION PERCENT OF PRODUCTION PERSONAL INCOME PETROL PETROLEUM PRICES PETROLEUM PRODUCT PRICES PETROLEUM PRODUCTS POWER PRICE BENCHMARK PRICE CHANGES PRICE ELASTICITY PRICE INCREASE PRICE INCREASES PRICE LEVEL PRICE LIBERALIZATION PRICE MOVEMENTS PRICE OF OIL PRICE SUBSIDIES PRICE SUBSIDY PRICING MECHANISM PRIVATE CONTRACTORS PRIVATE INVESTORS PRODUCTION LEVEL PRODUCTION SHARING CONTRACTS PRODUCTS MARKET PROVEN RESERVES PUBLIC FINANCES PURCHASING PURCHASING POWER REFINED PRODUCTS REFINERIES RESERVE RETAIL RETAIL PRICE RETAIL PRICES RETURNS ROYALTY RULE OF LAW SAFETY NET SALE SALES SMALL BUSINESSES STREAM SUBSTITUTE SUBSTITUTE PRODUCT SUBSTITUTE PRODUCTS SUPPLY COST TAX OBLIGATIONS TAX RATE TAX REVENUE TAX REVENUES TRANCHE TREASURY VOLATILITY WHOLESALE PRICE WORLD CRUDE WORLD ENERGY WORLD OIL WORLD OIL PRICES Agustina, Cut Dian R.D. Arze del Granado, Javier Bulman, Tim Fengler, Wolfgang Ikhsan, Mohamad Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| geographic_facet |
East Asia and Pacific Indonesia |
| relation |
Policy Research Working Paper; No. 4718 |
| description |
Indonesia's oil revenues and fuel
subsidies dominate the nation's economic policy agenda.
This paper estimates the impact of higher international oil
prices on the Indonesian government's fiscal position
in 2008 and beyond. It analyzes the interactions between
government revenues and expenditures, as well as
international oil prices, energy subsidies, and
inter-governmental transfers. Looking at the impact of oil
prices over US$100 per barrel, the paper presents five main
findings. First, despite record high oil prices, the
government's oil and gas revenues have been decreasing
relative to non-oil and gas revenues since 2001. Second,
fuel subsides will reach record levels in 2008 while
electricity subsidies have been increasing even faster.
Third, the paper finds that most of the fuel subsidy that
directly benefits households goes to the richest 20 percent.
Fourth, even at levels above US$100 per barrel, the
government receives more revenues from oil and gas than it
spends on energy subsidies. However, due to significant
revenue-sharing with sub-national governments, high oil
prices are net-negative for the central government, while
they create fiscal windfalls for many regions. Finally, the
oil sector's positive impact on Indonesia's public
finances declines as oil prices rise, because subsidies and
other expenditures outgrow oil and gas revenues. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Agustina, Cut Dian R.D. Arze del Granado, Javier Bulman, Tim Fengler, Wolfgang Ikhsan, Mohamad |
| author_facet |
Agustina, Cut Dian R.D. Arze del Granado, Javier Bulman, Tim Fengler, Wolfgang Ikhsan, Mohamad |
| author_sort |
Agustina, Cut Dian R.D. |
| title |
Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| title_short |
Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| title_full |
Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| title_fullStr |
Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| title_full_unstemmed |
Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances |
| title_sort |
black hole or black gold? the impact of oil and gas prices on indonesia's public finances |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/09/9847980/black-hole-or-black-gold-impact-oil-gas-prices-indonesias-public-finances http://hdl.handle.net/10986/6993 |
| _version_ |
1764401218914877440 |
| spelling |
okr-10986-69932021-04-23T14:02:32Z Black Hole or Black Gold? The Impact of Oil and Gas Prices on Indonesia's Public Finances Agustina, Cut Dian R.D. Arze del Granado, Javier Bulman, Tim Fengler, Wolfgang Ikhsan, Mohamad ACCOUNTING ALTERNATIVE FUELS ANECDOTAL EVIDENCE APPROACH AUTOMOTIVE DIESEL AVERAGE PRICE AVERAGE PRICES BALANCE BANK ACCOUNTS BARREL BARREL OF OIL BARRELS PER DAY BORDER PRICE BUDGETING CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITAL STOCK CARBON CARBON EMISSIONS CASH FLOWS CHEMICAL COMPOSITION COMPETITIVENESS CONSUMPTION OF FUEL CONSUMPTION OF PETROLEUM CONTRACTUAL OBLIGATION CORPORATE INCOME TAX COST OF GASOLINE CRUDE OIL CRUDE OIL EXPORTS CRUDE OIL PRICE CRUDE OIL PRICES CRUDE OIL PRODUCTION CRUDE OILS CRUDE PRICE CRUDE PRODUCTION DEBTS DECENTRALIZATION DERIVATIVES DEVELOPING COUNTRIES DIESEL DIESEL CONSUMPTION DIESEL OIL DOMESTIC FUEL DOMESTIC MARKET DOMESTIC PETROLEUM DOMESTIC REFINING EI ELECTRICITY ELECTRICITY PRICE ENERGY ECONOMICS ENERGY PRICES ENERGY PRODUCERS ENERGY PRODUCTION ENERGY PRODUCTS EXCHANGE RATE EXPENDITURE EXPENDITURES EXTRACTION FINANCIAL MANAGEMENT FISCAL DECENTRALIZATION FOREIGN CURRENCY FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL OIL FUEL PRICE FUEL PRICES FUEL PRODUCTS FUEL TYPE FUEL TYPES FUELS GAS GAS EXPORTS GAS FIELDS GAS LAW GAS OUTPUT GAS PRICES GAS PRODUCTION GAS RESERVES GAS SUBSIDY GASOLINE GASOLINE CONSUMPTION GASOLINE DEMAND GASOLINE PRICES GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REGULATION GOVERNMENT REVENUE GOVERNMENT REVENUES HIGHER ENERGY CONSUMPTION HIGHER GAS HIGHER OIL PRICES HUMAN CAPITAL IMPLICIT SUBSIDY INCOME LEVEL INCOME LEVELS INCOME TAX INFLATIONARY PRESSURES INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INTERNATIONAL MARKET INTERNATIONAL OIL PRICES KEROSENE KEROSENE CONSUMPTION MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MARKET PRICE MARKET PRICES MARKET SUPPLY MILLION BARRELS MINERAL MINERAL RESOURCES MONETARY FUND NATURAL GAS NATURAL RESOURCES NET OIL OIL OIL & GAS OIL AND GAS OIL COMPANY OIL EXPORTER OIL EXPORTS OIL IMPORTER OIL IMPORTS OIL PRICE FLUCTUATIONS OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RECOVERY OIL RESERVES OIL REVENUES OIL SECTOR OILS OPPORTUNITY COST PACIFIC REGION PERCENT OF PRODUCTION PERSONAL INCOME PETROL PETROLEUM PRICES PETROLEUM PRODUCT PRICES PETROLEUM PRODUCTS POWER PRICE BENCHMARK PRICE CHANGES PRICE ELASTICITY PRICE INCREASE PRICE INCREASES PRICE LEVEL PRICE LIBERALIZATION PRICE MOVEMENTS PRICE OF OIL PRICE SUBSIDIES PRICE SUBSIDY PRICING MECHANISM PRIVATE CONTRACTORS PRIVATE INVESTORS PRODUCTION LEVEL PRODUCTION SHARING CONTRACTS PRODUCTS MARKET PROVEN RESERVES PUBLIC FINANCES PURCHASING PURCHASING POWER REFINED PRODUCTS REFINERIES RESERVE RETAIL RETAIL PRICE RETAIL PRICES RETURNS ROYALTY RULE OF LAW SAFETY NET SALE SALES SMALL BUSINESSES STREAM SUBSTITUTE SUBSTITUTE PRODUCT SUBSTITUTE PRODUCTS SUPPLY COST TAX OBLIGATIONS TAX RATE TAX REVENUE TAX REVENUES TRANCHE TREASURY VOLATILITY WHOLESALE PRICE WORLD CRUDE WORLD ENERGY WORLD OIL WORLD OIL PRICES Indonesia's oil revenues and fuel subsidies dominate the nation's economic policy agenda. This paper estimates the impact of higher international oil prices on the Indonesian government's fiscal position in 2008 and beyond. It analyzes the interactions between government revenues and expenditures, as well as international oil prices, energy subsidies, and inter-governmental transfers. Looking at the impact of oil prices over US$100 per barrel, the paper presents five main findings. First, despite record high oil prices, the government's oil and gas revenues have been decreasing relative to non-oil and gas revenues since 2001. Second, fuel subsides will reach record levels in 2008 while electricity subsidies have been increasing even faster. Third, the paper finds that most of the fuel subsidy that directly benefits households goes to the richest 20 percent. Fourth, even at levels above US$100 per barrel, the government receives more revenues from oil and gas than it spends on energy subsidies. However, due to significant revenue-sharing with sub-national governments, high oil prices are net-negative for the central government, while they create fiscal windfalls for many regions. Finally, the oil sector's positive impact on Indonesia's public finances declines as oil prices rise, because subsidies and other expenditures outgrow oil and gas revenues. 2012-06-04T15:56:13Z 2012-06-04T15:56:13Z 2008-09 http://documents.worldbank.org/curated/en/2008/09/9847980/black-hole-or-black-gold-impact-oil-gas-prices-indonesias-public-finances http://hdl.handle.net/10986/6993 English Policy Research Working Paper; No. 4718 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Indonesia |