Suspension of OPEC Membership Has Little Effect on Budget: Coordinating Minister

Jakarta (cidiss.co) – Coordinating Minister for Economy Darmin Nasution said the effect of the country quitting OPEC is insignificant on the state budget.

“The impact is on the state budget . What is the price if we are in or outside OPEC. It has no much difference,” Darmin said here on Thursday.

The minister was asked to comment about the effect of the countrys decision to suspend its OPEC membership.

Energy and Mineral Resources (ESDM) Minister Ignasius Jonan announced the decision at an OPEC meeting in Vienna, Austria on Wednesday .

OPEC announced its decision on Wednesday to cutback its crude oil production by 1.2 million barrels to 32.5 million barrels per day and Indonesia was to contribute 37,000 barrels to the production cutback per day.

Jonan said Indonesia, an oil net importer could not afford a cut of more than 5,000 barrels , therefore, it decided to temporarily quit the cartel.

Oil revenue is still a life blood of the countrys economy.

The OPECs production cutback, the first in 8 years, to be effective in January next year, resulted in a surge in the oil price in the global market.

Non OPEC oil producer Russia supported the policy pledging to cut its production by 300,000 barrels per day .

“This is the first time Russia joining OPEC in reducing production to prop up oil prices,” Darmin said.

He said the significance of the cutback on the price would depend on how much Russia would commit itself to its decision and how good is the cohesion of OPEC as a cartel.

It was the second time Indonesia to suspend its OPEC membership.

In 2009 the country officially suspend its membership in OPEC, but early this year it decided to be an active member again.

ANTARA News