Airlangga University Professor Outlines Realistic Strategies to Safeguard the State Budget Amid High Oil Prices

JAKARTA, KOMPAS.com - The government is assessed as needing to alter its fiscal strategy if geopolitical conflicts persist for a long time and oil prices remain high. Short-term approaches are no longer deemed sufficient.

Professor Rahma Gafmi from Universitas Airlangga believes that pressure lasting more than six months will test the resilience of the State Revenue and Expenditure Budget (APBN). Temporary instruments such as cash buffers are no longer adequate.

“Facing the risk of prolonged conflict lasting more than six months with stably high oil prices, the government can no longer rely solely on temporary instruments. Survival strategies must change to adaptation strategies,” Rahma told Kompas.com on Monday (13/4/2026).

This step preserves fiscal space without adding debt. Funds that have been blocked can be redirected when energy subsidies increase.

“These funds serve as an emergency reserve within the existing budget allocation, so if energy subsidies swell, the government does not need to take on new debt, but can simply redirect the previously blocked funds,” she explained.

Controlling the consumption of fuel oil (BBM) is considered more effective than price increases. Rahma encourages tightening regulations on the use of subsidised BBM.

Restrictions are directed at certain vehicles to ensure consumption remains in line with the APBN quota.

“Technically, this is more effective in safeguarding fiscal stability than merely relying on price subsidies,” she said.

This policy functions as a natural hedge to cover the increasing burden of oil imports.