Sri Mulyani: Manufacturing And Oil And Gas Destroyed Because Of The COVID-19 Pandemic

Minister of Finance, Sri Mulyani. (Photo: Instagram @smindrawati)

JAKARTA - Finance Minister Sri Mulyani Indrawati said the COVID-19 pandemic has hit many industries. A number of industries that have suffered a severe hit include manufacturing, transportation, hotels to the oil and gas (oil and gas) sector.

"Indonesia is currently also struggling to recover its economy in various sectors. The worst hit due to COVID-19 is of course related to the transportation, trade, and hotels and restaurants sectors. We also saw a very significant decline in the manufacturing sector," he said, in a statement. the 2020 International Convention on Indonesian Upstream Oil and Gas, Wednesday, December 2.

Not only that, said Sri Mulyani, the mining sector, including oil and gas, was also severely hit. Sri said the pandemic had made demand decline very significantly globally, and supply equipment was also under pressure by many factors.

Sri Mulyani said, regarding the price of oil, her party saw dramatic changes and uncertainties during this pandemic. Even at some points, oil prices were negative for two days. It has never happened before.

"This shows how challenging and extraordinary the situation we are facing, including in the oil and gas industry," he said.

According to Sri Mulyani, this matter needs attention. This is because the oil and gas sector has been struggling for a long time since he became finance minister in the previous period.

"The oil and gas sector has actually been struggling for a long time. I served as finance minister about 10 or 15 years ago, and at that time, discussions of the decline in oil and gas production were already happening," he said.

This state treasurer said, there are several things that really need to be addressed in order to increase the level of production or lifting, both in the oil and gas sectors. First, of course there must be the right policies regarding how to encourage exploration.

"Because relying on existing production, which has all declined due to its natural age, will be something that we cannot use as an approach. Therefore, we need to prepare a new strategy," he explained.

Furthermore, he emphasized, for existing production, his party would really ensure that there would be efficiency, given the irregular changes in oil and gas prices. But at the same time, the government also wants to encourage SKK Migas and the industry to continue to explore.

"It is not easy, especially with the projected oil price which has not recovered quickly. But this exploration can be done with technology and government support," he said.

Second, said Sri Mulyani, the government also uses all instruments to significantly support each industry. Especially for the oil and gas sector, he believes that the Ministry of Energy has launched two options for you to explore, namely whether to use a cost recovery or a gross split.

"This is an option that can be given and it will depend on the industry itself to choose which one is more suitable for you," he explained.

Sri Mulyani also said that through the Job Creation Law, the government would cut taxes on business entities. In addition, he also uses fiscal instruments to support the entire oil and gas industry business cycle, from exploration to production.

"The incentives provided from the fiscal include a reduction in income tax which we will reduce from 25 percent to 22 percent or 20 percent in the next two years. This has also been stated in the Job Creation Law," he said.