JAKARTA, KOMPAS.com \u2014 Global geopolitical turmoil driving energy\nprice spikes again draws attention to Indonesia\u2019s economy. A country\nstill dependent on energy imports faces fiscal pressure if world oil\nprices move far above the assumptions in the State Budget (APBN). The\nMonitoring Issue of Food, Energy and Sustainable Development report\nreleased by the Centre for Food, Energy and Sustainable Development\n(CFESD) of the Institute for Development of Economics and Finance\n(Indef) shows that escalation of conflict in the Middle East has\nincreased the risk of disruption to global energy supplies. In this\ncontext, global energy price volatility affects not only the energy\nsector but also has direct implications for fiscal policy, particularly\nthrough energy subsidies and compensation.<\/p>\n
Abra Talattov, Head of CFESD Indef, said that spikes in global energy\nprices can exert pressure on the APBN because domestic energy pricing\nremains heavily dependent on government intervention. \u2018The APBN\ncontinues to function as the main shock absorber against fluctuations in\nglobal energy prices,\u2019 Talattov said in the report, cited on Thursday\n(5\/3\/2026).<\/p>\n
International crude Brent prices were under pressure throughout 2025\nbefore rising again as geopolitical tensions increased. Data in the\nIndef report shows that by the end of January 2026 Brent was around\n$66.7 per barrel, down about 15 percent year on year. However, the\nescalation of the conflict between the United States and Israel against\nIran pushed Brent up to around $82 per barrel, up about 13 percent since\nthe conflict began.<\/p>\n
This new energy risk constellation also relates to potential\ndisruptions to global energy trade routes, especially the Strait of\nHormuz. This strategic maritime route is one of the most critical points\nin the global energy trading system as around a fifth of the world\u2019s\ncrude oil supply passes through the area each day. Supply uncertainty\nfrom the Persian Gulf could trigger larger energy price spikes if the\nconflict continues or intensifies.<\/p>\n
In the structure of national energy policy, the Indonesian government\nuses subsidies and compensation to keep domestic energy prices stable.\nThis policy makes the APBN the main buffer when global energy prices\nrise. The report notes that the surge in global energy prices in 2022\ntriggered a sharp increase in energy subsidies and compensation.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indef-the-state-budget-could-be-pressured-if-oil-prices-continue-to-rise-1772714006", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }