FAIRBANKS - The price of Alaska crude oil has plummeted in the last six months, but an economist said Monday the state is still in position to reap a big surplus.
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Oil fell almost $30 a barrel in six months, but a higher-than-expected average price for the fiscal year of 2007 means the state could still collect a surplus of about $1.3 billion, Michael Williams, chief economist with the Department of Revenue, told the Senate Finance Committee.
The price of Alaska crude was $47.53 in mid-January, $28 less than its peak in July 2006. However, the average price so far for 2007 is $61.81. The 2007 fiscal year runs through the end of June.
The average price is the figure used to calculate the surplus and was about $2.70 higher than what the revenue department had projected for mid-January.
In fiscal 2008 the department expects oil prices to average about $8 less than in 2007. Oil production is expected to drop 12 percent this year, but rebound in 2008.
Charles Fedullo, a spokesman for Gov. Sarah Palin said Tuesday that the administration would wait for the first oil tax returns and the Revenue Department's April forecast in crafting a budget for 2008.
"We're going to try to keep to the goal of spending what we bring in," Fedullo said.