Jakarta, 23 June 2026 — Geopolitical dynamics between the United States and Iran have caused global oil prices to fluctuate throughout 2026. The tensions had previously pushed crude oil prices above USD120 per barrel. Global oil prices eased after a temporary peace agreement was reached in mid-June. As of trading on 22 June 2026, Brent crude moved within the range of USD80 per barrel. However, this movement remains vulnerable, as Iran has repeatedly closed the Strait of Hormuz and further negotiations have yet to be concluded.

Fluctuations in global oil prices also affect domestic energy prices. This condition underscores that Indonesia’s state budget macroeconomic assumptions, particularly the Indonesian Crude Price (ICP) and the rupiah exchange rate, remain highly exposed to global volatility.

Prasasti Policy and Program Director Piter Abdullah said the government has room to adjust Pertamax prices in line with market prices, while ensuring that subsidized fuel remains well-targeted. According to him, such an adjustment is reasonable as long as it is carried out in a measured manner.

“The decline in global oil prices opens room for the government to adjust Pertamax prices. This adjustment does not mean returning to the old price, but rather lowering prices reasonably in line with market developments. The exact amount should be calculated by the government and Pertamina,” Piter said.

Piter emphasized the need for a clear division of roles between subsidized and non-subsidized fuels. This principle, he said, would help keep the economy more manageable.

“The government’s obligation is to safeguard subsidized fuel. Non-subsidized fuel should be allowed to follow market prices. This way, the public can clearly understand which prices are protected by the government and which prices follow the market,” Piter said.

He added that adjusting Pertamax prices is important to prevent consumers from shifting to Pertalite. This trend, he noted, has already begun to appear on the ground.

“Long queues for Pertalite indicate that some consumers have already shifted. If this continues, the limited Pertalite quota may become insufficient. Supply and demand would no longer match. The risk could even lead to shortages,” he said.

For this reason, Piter said improvements in the distribution of subsidized fuel must proceed in parallel. “The government needs to ensure that Pertalite distribution remains well-targeted. The distribution mechanism must be improved so that subsidized fuel truly reaches those who are entitled to receive it,” Piter said.

In the medium term, Piter emphasized that accelerating improvements in the energy mix will be key. According to him, Indonesia has significant resources to support this agenda. “Indonesia is very rich in energy resources, including new and renewable energy as well as biomass. This step could reduce fuel and gas consumption while also easing the subsidy burden,” Piter explained. At the fiscal level, Piter views the government’s room for maneuver as lying on the expenditure side, rather than the revenue side. He warned that suppressing state revenue could be counterproductive.

“State revenue relies on taxes, so suppressing it could have a negative impact. The most appropriate step is to improve spending efficiency and reprioritize government programs,” he said. Prasasti views the easing of global oil prices as a momentum that the government can use carefully. Adjusting Pertamax prices can help reduce consumer migration to subsidized fuel. Better-targeted subsidized fuel pricing can close gaps for leakage. Improvements in the energy mix and disciplined spending can help keep the state budget healthy amid global uncertainty.

“In the midst of this volatility, the courage to pursue efficiency and reprioritize programs becomes an important asset to make our state budget more resilient against shocks,” Piter said. (*)