STATE BUDGET AT SAFE LEVEL

Jakarta, Oct 15 (ANTARA) - The 2009 state budget will remain at a safe level even though the world crude price is expected to increase up to US$75 per barrel at the end of this year, a finance ministry official said.

The Finance Ministry's head for fiscal policy affairs Anggito Abimanyu said here on Thursday the state budget would remain safe although in the 2009 State Budget the Indonesian Crude Price (ICP) was set at US$60 per barrel.

"Until the end of the year, I think the ICP will remain around 60 dollars per barrel," he said.

Abimanyu said at the beginning of 2009 the oil price was below the assumed 60 US dollars per barrel but now it had exceeded the assumed price.

The world crude price is continuing to increase. According to latest reports, the world crude price is now over 75 US dollars per barrel.

The finance ministry official said the international oil price was now about 2-5 dollars over the ICP.

He also said companies like state-owned oil and gas company Pertamina and state power utility PLN needed to hedge their businesses to avoid losses as a result of oil price fluctuations.

"Companies can use the state budget assumption as reference so that when prices fluctuate they will not be affected," he said.

He said the hedging policy was once applied by Mexico with satisfactory results.