Government expects

additional revenues for

infrastructure
The Jakarta Post, Jakarta | Headlines | Sat,
October 06
Finance Minister Agus Martowardojo is
hoping more revenue will be allocated to
infrastructure spending next year following the
recent agreement between the House of
Representatives and the government on
optimization of state
income.
Based on recent meeting results with the
House, infrastructure spending could stand at
more than Rp 200 trillion (US$20.9 billion) in
2013. It could even reach around Rp 210
trillion, Agus told reporters at his office in
Jakarta on Friday.
The government initially proposed Rp 193.8
trillion ($20.2 billion) of infrastructure in the
2013 state budget (RAPBN).
Under the current 2012 revised state budget
(APBN-P), infrastructure spending stands at
Rp 174 trillion this year.
In the last few weeks, the government had
been deliberating with the House on potential
income and financing optimization. They then
agreed to increase state revenues by Rp 22.72
trillion in the 2013 state budget by raising
revenue target from tax and non-tax sources.
About 50 percent of the additional funds will
be used to finance routine spending needs,
such as paying state apparatus salaries and the
rest for infrastructure spending.
Finance Ministrys fiscal agency interim head
Bambang Brodjonegoro said that about Rp
14.06 trillion of the additional funds are
expected to come from tax sources and the rest
from non-tax sources.
Finance Ministry budgeting directorate general
Herry Purnomo said that the additional funds
would be mostly utilized for capital spending
needs, particularly to finance infrastructure
development.
According to Herry, the ministry has been
conducting research and analysis on how to

determine the criteria to distribute the

additional funds for ministries and state
institutions.
Based on the analysis, Herry said that the
funds could be distributed to at least seven
ministries, such as the Transportation Ministry,
the Public Works Ministry and the Energy and
Mineral Resources Ministry.
Basically, the distribution should be focused
on financing infrastructure development,
Herry said.
Indonesias economy has managed to record
robust growth amid the global crisis. However,
critics and economists believe the government
needed to accelerate infrastructure
development to reach long term sustainable
growth.
As of now, growth in Indonesia is still mainly
driven by domestic consumption due to the
massive demographic profile of the country. To
reach long-term and sustainable growth, the
government has been told to intensify its
spending, particularly on infrastructure.
To accelerate infrastructure development,
President Susilo Bambang Yudhoyono has
issued an ambitious blueprint called the
Acceleration and Expansion of Indonesias
Economic Development Master Plan (MP3EI).
Under the master plan, the government plans to
develop infrastructure to improve connectivity
throughout the archipelago. The development
is to take place in six economic corridors
Sumatra, Kalimantan, Java, Sulawesi, Bali and
Nusa Tenggara and the Papula-Maluku. The
MP3EI requires more than Rp 3,000 trillion in
financing.

Global refining industry shifts

to Middle East
AGENCE FRANCE PRESSE
Monday 8 October 2012

JUBAIL: As high oil prices and improved

efficiency force refineries in the US and
Europe toward closure, the industry is
shifting toward the Middle East and Asia in
a move fueled by a thirst for energy among
emerging economies.
China and India in particular are driving
the demand, with multiple refineries
cropping up in China and the Gulf and
Indian energy group Reliance, for example,
running two giant refineries capable of
processing a total of 1.2 million barrels of
crude oil per day.
In eastern Saudi Arabia, state oil group
Aramco the worlds largest and
French counterpart Total are putting the
final touches on their Jubail site, which
will open next year as one of the worlds
biggest refineries.
The refinery will be able to process
400,000 barrels of crude oil per day and
will be fully operational by the end of
2013.
For Total, the project is very important for
our future, because we were everywhere in
the Middle East, except here, and its a
way of paving the way for the company,
Totals head of the refining and chemicals
division, Patrick Pouyanne, said on a tour
of the site this week.
Totals expansion to Saudi Arabia comes as
the energy group and others reduce their
presence in Europe, with Total closing its
Flanders plant in northern France in 2010
and Swiss refiner Petroplus shuttering its
Reichstett plant last year.
Since 2003, Total has slashed its refining
capacity on the continent by 24 percent,

while Anglo-Dutch oil giant Shell and

British energy group BP have reduced
theirs by 40 percent.
Driving the phenomenon is an increase in
oil prices that has dampened fuel sales and
made fuel oil a less competitive option for
heating than gas.
The problem is present everywhere in
Europe, its a strong trend that wont
abate, refining expert Constancio Silva
from the French institute for oil and new
energies (IFPEN) told AFP.
Well consume less oil and in a more
efficient manner, and that leads to a
reduction in refining capacity, he added,
saying the situation was mirrored across
the Atlantic.
In the United States as well, there are
shutdowns and key changes among
refineries, and this year we witnessed the
largest reduction in capacity, he said.
He added that the cropping up of new
refineries in the Middle East is only
aggravating the problem, as the sites
compete with their European counterparts.
Total said that while the group hopes to
beef up its presence in the Middle East, it
will still keep its European refining
sustainable.
There are still refining overcapacities in
Europe and theyll have to be reduced. But
streamlining doesnt necessarily mean
shutting down, but also better managing
what exists, or producing less to produce
better, Pouyanne said on his tour of Jubail
this week.
He cited as an example the companys
heavy investment in its Seine-Maritime
refinery in northern France to adapt it to
the change in demand and said certain
European sites could also be pooled
together.