Calculating Fuel Prices for 1 September 2026: An Increase or a Decrease?

Non-subsidised fuel prices (BBM) are likely to experience an increase or, at the very least, remain unchanged as of 1 September 2026. This projection is based on the rising average price of global crude oil, contrasted against the strengthening of the Rupiah against the US Dollar. These two factors are the primary determinants in the direction of non-subsidised fuel price adjustments domestically.

According to Refinitiv, the average price of Brent crude in August 2026 stood at US$87.96 per barrel, a 4.74% increase compared to the July 2026 average of US$83.97 per barrel. Meanwhile, the average price of West Texas Intermediate (WTI) was at US$82.29 per barrel in August 2026, up 4.47% from the July average of US$78.76 per barrel.

Global oil price movements throughout August 2026 were heavily influenced by geopolitical dynamics and supply from the Middle East. Prices initially rose as markets monitored the US-Israel-Iran conflict, which caused uncertainty regarding the smooth flow of oil through the Strait of Hormuz. This route is critical, as approximately 20% of global oil supply passes through it.

However, pressure on oil prices began to ease towards the end of August. Markets received news regarding the potential reopening of the Strait of Hormuz and additional oil flows exiting the region. While the recovery of oil flows through the Strait is not yet fully stable, the increased volume has led the market to assess supply risks as less severe than previously feared.

Additionally, oil prices faced pressure from statements by Federal Reserve Chair Kevin Warsh, who suggested the possibility of interest rate hikes later this year to curb inflation. High interest rate signals typically cause market concern regarding energy demand prospects, as expensive borrowing costs can stifle economic activity.

Despite these factors, geopolitical risks remain. Attacks on Russian oil refineries in Ukraine continue to be a market concern due to the potential disruption of global petroleum product supplies. Consequently, oil prices moved in two directions in August: rising on average due to geopolitical risks, but trending downwards at month-end due to hopes for the Strait of Hormuz reopening and tighter US monetary policy signals.

Simultaneously, the Rupiah strengthened against the US Dollar throughout August 2026. Data from Refinitiv shows the Rupiah strengthened by 1.32% from its late July position of Rp17,990/US$ to Rp17,752/US$ during intraday trading on Monday (30/8/2026). On a monthly average basis, the Rupiah also showed strength, averaging Rp17,810.33/US, a0.98.

Regarding the September 2026 fuel prices, the government determines prices based on a specific formula. The two main variables are the average global oil price and the Rupiah exchange rate, given Indonesia’s high reliance on oil imports. According to the Decree of the Minister of Energy and Mineral Resources Number 19 K/10/MEM/2019, the formula uses the average publication of the Mean of Platts Singapore (MOPS) in USD/barrel.

The reference period for the 1 September 2026 price setting is from 25 July to 24 August 2026. During this period, the average Brent price was US$87.91 per barrel, an 8.50% increase compared to the previous reference period (25 June to 24 July 2026), which was US$81.02 per barrel. WTI also saw an increase, averaging US$82.32 per barrel, up 7.91% from the previous period’s US$76.29 per barrel.

This rise in average oil prices certainly puts pressure on domestic oil import costs. However, the exchange rate provides some relief. The average Rupiah during the 25 July to 24 August 2026 period was Rp17,887.14/US, strengtheningby0.39.

This condition means that the potential adjustment for non-subsidised fuel prices may not be a straightforward increase. From the oil price perspective, there is room for an increase due to the significant rise in the reference period average. However, the strengthening Rupiah acts as a buffer, as it makes the cost of importing oil in Rupiah lighter. Therefore, while non-subsidised fuel prices have the potential to rise on 1 September 2026, the possibility of prices being held steady remains open.

As a note, Pertamina already implemented price adjustments for non-subsidised fuel on 1 August 2026. In the Jabodetabek area, the price of Pertamax Turbo decreased to Rp18,300 per litre from Rp19,300 per litre. A decrease was also seen in Pertamax Green 95, which dropped to Rp16,600 per litre from Rp17,000 per litre, while Pertamax RON 92 fell to Rp15,950 per litre from Rp16,250 per litre. However, the August adjustment did not apply to all non-subsidised types; Pertamina Dex remained at the level of Rp21,000 per litre.