Indonesia Rules Out Subsidized Fuel Price Hike as Oil Nears $120 per Barrel
Jakarta. Indonesia will not raise prices of subsidized fuel through the end of 2026, Finance Minister Purbaya Yudhi Sadewa said on Monday, even as global crude oil prices approach $120 per barrel amid escalating tensions in the Middle East.
Subsidized gasoline is currently priced at Rp 10,000 ($0.6) per liter, while subsidized diesel stands at Rp 6,800 per liter.
Speaking at a hearing with House Commission XI, which oversees fiscal and financial affairs, Purbaya underlined the government’s commitment to maintaining low fuel prices to protect household purchasing power.
“We are prepared not to increase subsidized fuel prices until the end of the year,” Purbaya said.
He was responding to a question from Commission XI Chairman Mukhamad Misbakhun regarding the resilience of the state budget if global oil prices remain above $100 per barrel.
Purbaya said the Finance Ministry has prepared a range of fiscal simulations, including worst-case scenarios, to address oil price shocks exceeding the official assumption of $70 per barrel agreed with the House.
He added that the government’s fiscal position remains sufficiently strong to absorb the pressure.
“We have prepared for an average oil price of $100 through year-end. Under current conditions, we are still resilient, and if necessary, there are additional buffers. Our fiscal position is secure,” Purbaya said, without elaborating further.
Earlier, the government had proposed introducing windfall profit taxes on coal and other commodities to boost revenue. It has also begun implementing export levies on coal and gold as part of efforts to contain the budget deficit.
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