Jakarta. Economists say Indonesia’s move to raise non-subsidized fuel prices marks a long-overdue market adjustment, correcting earlier delays despite rising global oil prices.

Energy economist at Gadjah Mada University, Fahmy Radhi, said the move reflects a return to market-based pricing after the government previously held back increases despite rising global crude prices.

“This increase is appropriate. It even serves as a correction to the previous policy that did not raise non-subsidized fuel prices, even though prices for non-subsidized fuels, particularly RON 92 and above, are determined by market mechanisms,” Fahmy said on Saturday.

He noted that Indonesia had lagged behind other countries in adjusting fuel prices. Since March 2026, countries such as Singapore, Malaysia, India, and parts of Europe have already raised fuel prices in response to higher global oil prices. Indonesia only implemented the adjustment in mid-April, signaling efforts to cushion price pressures.

Fahmy added that, in theory, non-subsidized fuel prices should follow global oil movements, rising when crude prices increase and falling when they decline.

He also assessed that the hike would have limited impact on the broader economy, as consumption of non-subsidized fuel remains relatively small and is not widely used for essential goods distribution.

“The impact will not be significant because users of non-subsidized fuel are fewer compared to subsidized fuel users such as Pertalite and diesel. In addition, non-subsidized fuel is not used for transporting basic goods,” he said.

Fahmy emphasized that the government’s decision to keep subsidized fuel prices unchanged is a strategic move to maintain purchasing power and control inflation, as any increase in subsidized fuel would directly affect the prices of goods and services.

“If subsidized fuels like Pertalite and diesel were to increase, it would certainly trigger inflation and weaken purchasing power. So the policy of raising non-subsidized fuel prices while holding subsidized fuel steady is appropriate,” he added.

On the risk of consumers switching to subsidized fuel, Fahmy said the likelihood remains low, as users of higher-octane fuels are generally reluctant to downgrade. Moreover, prices for Pertamax (RON 92) and Pertamax Green 95 were left unchanged.

A separate assessment from Manado State University economist Robert Winerungan also supported the policy, highlighting the importance of keeping subsidized fuel prices stable to protect lower-income groups and manage inflation.

“Non-subsidized fuel is mostly consumed by higher-income groups and does not significantly contribute to inflation,” he said.

Robert added that Indonesia’s fuel prices remain relatively affordable compared to many other countries, particularly for subsidized fuels. However, he urged the government to anticipate potential shifts in consumption through stricter regulations.

One proposed measure is to restrict subsidized fuel use for certain vehicles, such as those priced above Rp 500 million ($29 thousand).

“There needs to be clear regulations to prevent misuse. This policy should not be exploited for personal gain,” he said.

He also stressed the importance of public participation in maintaining energy efficiency and ensuring adequate subsidized fuel supply to avoid shortages.

Data from MyPertamina shows significant increases in several non-subsidized fuel prices. Pertamax Turbo rose to Rp 19,400 ($1.12) per liter from Rp 13,100, Dexlite climbed to Rp 23,600 from Rp 14,200, and Pertamina Dex increased to Rp 23,900 from Rp 14,500.

Meanwhile, the government kept prices for subsidized fuels unchanged, along with certain non-subsidized variants such as Pertamax at Rp 12,300 per liter and Pertamax Green at Rp 12,900 per liter. Pertamax, while technically a non-subsidized fuel, had previously been excluded from price hikes to prevent a potential shift to subsidized Pertalite, but has now been adjusted in line with market conditions.