TEMPO.CO, Jakarta - The Coordinating Minister for the Economy, Airlangga Hartarto stated that the Indonesian government has not decided to raise subsidized fuel prices, such as solar and Pertalite, despite the creeping rise in world oil prices. As of Thursday, March 5th, 2026, the price of Brent oil was above US$82 per barrel.
The government is still waiting for the development of geopolitical conflicts in the Middle East. "There has been no decision (regarding the increase of subsidized fuel prices). Our budget in the APBN (state budget) is at US$70 per barrel of ICP, so we are waiting," said Airlangga at Menara Batavia in Jakarta, on Thursday, March 5, 2026.
Airlangga stated that it's too early to determine how long the government can hold off the impact of the oil price surge. However, he stated that it is too early to decide on raising fuel prices. "This is too early. Until when? Well, a war could last for three months, six months, or longer. So, we each have our scenarios," he said.
Previously, the Secretary of the Coordinating Ministry for the Economy, Susiwijono Moegiarso, stated that the state budget (APBN) would bear a significant additional burden, even though the increase in oil prices is only a difference of US$1.
"For every one-dollar increase in ICP (Indonesia's crude oil price), from the expenditure side, we have to add Rp10.3 trillion due to energy compensation subsidies," he said during a discussion forum held by UOB Indonesia in South Jakarta, on Monday, March 2, 2026.
Susi explained that every one-dollar increase per barrel could also increase APBN revenue by around Rp3.6 trillion, derived from non-tax state revenue (PNBP) from the oil and gas sector. However, the state's cash flow continues to collapse because the difference in revenue is less than the amount of additional spending that needs to be disbursed.
"So our expenditures increase by Rp10.3 trillion for every one-dollar increase (in oil prices), and then we get Rp3.6 trillion. So, the deficit is about Rp6.7 trillion for every one-dollar increase," he said.
The macro assumption in the APBN sets the oil price at US$ 70 per barrel. Currently, world oil prices have crept above US$80 per barrel. Susi stated that the government has prepared several scenarios if oil prices do not drop due to an escalation of war. However, she has not confirmed whether the subsidy budget will increase or prices will rise at the consumer level.
Fahmy Radhi, a lecturer at the Faculty of Economics, Gadjah Mada University (UGM), stated that the increase in the global oil price would create a dilemma for the government. If fuel prices are not raised for consumers, the APBN will face a greater burden to cover the price difference. However, if the government raises prices at the consumer level, inflation will occur. "Because the largest consumers of fuel are Pertalite and solar. So, this is indeed a difficult choice for the government," he said.
Read: Indonesia Can Sustain Fuel Supply for 20 Days, Says Minister Bahlil
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