Jakarta, April 2, 2026 — In a press conference held by the Coordinating Ministry for Economic Affairs of the Republic of Indonesia on March 31, 2026, the government focused on the “8 Points of National Work Culture Transformation” and stated that there is no policy to adjust fuel prices (BBM), as previously feared by some parties. Meanwhile, for non-subsidized fuel, the government is still conducting further discussions with Pertamina and private fuel providers, and no decision has yet been made regarding price adjustments.
However, Prasasti Center for Policy Studies (Prasasti) reminds that global energy price dynamics remain heavily influenced by geopolitical tensions and uncertainties in global oil supply. Under these conditions, businesses and the public can remain calm but should stay vigilant and anticipate possible future changes in energy policy.
Arcandra Tahar, Board of Experts at Prasasti and an Indonesian energy expert, explained that within the global energy industry structure, Indonesia has limited room to independently determine oil prices. “Oil prices essentially follow market prices. Indonesia purchases from the market. Domestic production, whether through PSC contractors (K3S) or Pertamina, is also sold based on market prices,” he stated. The pressure is further exacerbated as global oil prices are now significantly above the assumptions set in the state budget (APBN). “The oil price assumption in the 2026 APBN is around USD 70 per barrel, while current market prices are in the range of USD 90–100 per barrel,” he added. This reflects increasing geopolitical risks and tightening global energy supply.
Arcandra noted that amid rising oil prices and a weakening Rupiah, the government faces an increasingly complex policy dilemma. If domestic fuel prices are maintained at current levels, the energy subsidy burden could increase significantly and put pressure on the state budget. “However, if fuel prices are adjusted to market mechanisms, the impact will be immediately felt through rising inflation and declining purchasing power,” he explained.
In a scenario where oil prices reach around USD 100 per barrel and the Rupiah depreciates to approximately IDR 17,000 per US dollar, “we estimate that the fiscal deficit could widen to around 3.3–3.5 percent of GDP, exceeding the 3 percent threshold that the government has consistently maintained,” said Halim Alamsyah, Board of Experts at Prasasti and former Deputy Governor of Bank Indonesia.
Based on past data, fuel price adjustments can have a significant impact on inflation. Prasasti’s analysis shows that such adjustments could add approximately 0.7 to 1.8 percentage points to inflation, depending on the magnitude and timing. “In a prolonged high oil price scenario, Indonesia’s economic growth could also slow. We estimate growth may fall to around 4.7–4.9 percent, below the average of approximately 5 percent in recent years,” Halim added.
Prasasti assesses that the pressures currently facing Indonesia’s economy do not stem from a single factor, but rather from a convergence of multiple global and domestic dynamics. Rising global oil prices due to geopolitical tensions, Rupiah depreciation, increasing fiscal pressure, and shifts in the external balance are simultaneously narrowing policy space. This situation requires the government to manage macroeconomic policy more cautiously.
Piter Abdullah, Policy and Program Director at Prasasti, views the current government policy as an effort to maintain public purchasing power by holding back fuel price increases. However, the sustainability of this policy depends on global oil price developments. “If oil prices continue to rise through the end of the year, it will become increasingly difficult to keep fuel prices unchanged. Therefore, the public and business actors need to understand that energy price adjustments under certain conditions are a reasonable policy response, as long as they are accompanied by well-targeted compensation,” he said.
Piter also emphasized that the combination of rising energy prices, currency depreciation, and fiscal pressure needs to be anticipated from a financial system stability perspective. According to him, amid increasing global uncertainty, policy coordination among economic authorities becomes even more crucial. “In such conditions, coordination through the Financial System Stability Committee (KSSK) is critical. Businesses and market players are awaiting policy signals from authorities such as Bank Indonesia, the Financial Services Authority (OJK), and the Ministry of Finance regarding the future direction of financial system stability,” he stated.
Prasasti believes the government must respond swiftly to potential disruptions to industrial activity arising from escalating global geopolitical tensions. Disruptions in energy supply and industrial raw materials could increase production costs and reduce manufacturing productivity. Therefore, policies ensuring energy availability for industry, including industrial gas, as well as measures to reduce production cost structures—such as evaluating import duties on raw and auxiliary materials—are essential to maintain efficiency and competitiveness of the national industry amid global pressures.