February 4, 2023

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1,038 Unexpected Oil Billions – NRK Norway – Overview of news from different parts of the country

But the Norwegian “Christmas present” from the continental shelf is not the kind that can be unwrapped and used now, Finance Minister Trygve Slagsvold Vedum (SP) points out.

We know that if we had spent more oil this year, the price would have gone up even more. He tells NRK that it will hit people with bad ways.

Oral Question Time at the Storting

Smile: He has a reason to smile, played by Finance Minister Trygve Slacksvold. But with big money comes a little trouble. Because the government will spend an extra 1,000 billion?

Photo: Heiko Jung / NTP

But the flow to the treasury from the oil and gas business is no small matter. New figures from Ministry of Finance Plain text shows just how adventurous this year’s growth has been:

  • In total, the state collects NOK 1,315.6 billion (net cash flow) from oil and gas operations this year.
  • This is NOK 1,000 billion more than estimated in the state budget.
  • The use of oil money increases by NOK 13.5 billion, from NOK 323.7 to NOK 337.2 billion this year.

The reason for the higher income is the very high gas prices driven by Russia’s war of aggression against Ukraine.

Out towards the role

Progressive finance policy Roy Stephenson believes the figures show the government has an explanatory problem.

Storting's Oral Question Time

Incorrect: Roy Steffensen of the Progress Party believes that the enormous additional income shows that there is no need to raise taxes to finance Norwegian welfare.

Photo: Vidar Root / NTP

– Steffenson says the Bible is wrong to say that a crisis means the government needs money, so taxes and duties must be increased.

– Returns are highly variable and the fund’s returns are lower in other years. But Scripture says we can maintain welfare despite that, and attacks what he calls the Frp logic:

– Short-term thinking and increased use of oil money can be a recipe for bigger problems, and it will hit the most vulnerable. The result will be higher prices and higher interest rates, says the finance minister:

– We cannot control Norwegian politics based on whether oil prices are high or low. The last two years have exemplified the same. We cannot use much in a year when oil prices are very high.

Will the Norwegian economy not tolerate spending a few more billions?

It is impossible to say exactly where the boundary is. But if we used only that money when we got more than 1,000 billion, it would have created huge challenges and even more price growth.

Do you understand that it’s hard for those in need to hear that the government can’t spend more money because of interest rates?

The key point is inflation, not interest rates. Veda says that interest rate is only an indirect effect of prices.

Need more power support

Roy Steffensen at Fremskrittspartiet invented the calculator. He says the finance minister is getting enough oil and gas revenue in one day to set aside the government to supply power to companies for the entire year 2022.

– Now for an enhanced electricity support scheme for storing businesses, in December, but to be extended until 2023, says Steffensen.

He believes the government should use extraordinary gas revenues to avoid bankruptcies as a result of high electricity prices.

– Now seeing that electricity prices are rising in the north, we have to signal that we are going to stand for business. The consequences of these abnormal revenues can lead to abnormal costs in electricity for the business. The Frp representative says this is actually additional taxation and points out that higher gas prices in Europe are pushing up the price of electricity in Norway.

But for the government, the use of this additional revenue is now questionable. As they go directly to oil funds, Veda points out:

Norway has decided to allocate the extra income to a fund. We decided decades ago. Every year we use the income from that fund, he says.

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