Falling oil prices costing Denmark billions – The Post

Falling oil prices costing Denmark billions

The state will have less elbow room for public spending

Low oil prices mean cheap petrol and diesel but also less money in the state treasury (photo: Rama)
March 10th, 2016 12:35 pm| by Lucie Rychla
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The historically low oil prices are not only affecting Maersk or DONG, but also taking a toll on Denmark’s coffers.

Based on the Finance Ministry’s calculations, the country’s financial flexibility will shrink by 5 billion kroner by 2020 solely due to the falling oil prices.

Loss in tax revenue
It is the first time the ministry has analysed what the collapse in oil prices means in terms of public finances and how it can affect the state budget.

The ministry has lowered its oil price projections by 30 percent, basing its calculations on the price of a barrel of oil costing 70 instead of 100 dollars.

As a consequence, the state is expecting significant losses in tax revenue in the future.

This issue is expected to be the main topic at the current summit of the local government organisation, KL.