Celios: March Inflation Influenced by Ramadan Break and Fuel Oil Consumption

Jakarta — Bhima Yudhistira Adhinegara, Executive Director of the Centre for Economic and Law Studies (Celios), projects inflation could surge to 5–5.4 per cent year-on-year in March due to the Eid al-Fitr holiday break in 2026, as well as high fuel oil (BBM) consumption that will affect the price of basic foodstuffs and staple goods during this period.

“Inflation is estimated to surge 5 to 5.4 per cent in March year-on-year due to the Ramadan factor, but also driven by rising unsubsidised fuel oil prices. Challenges will emerge when fuel oil consumption increases during the Ramadan exodus, whilst supply is disrupted by conflict in the Middle East,” Bhima said when contacted in Jakarta on Monday.

“Inflationary pressure from fuel oil to foodstuffs increases prices at traditional market and modern retail levels,” he added.

Furthermore, Bhima noted that rising logistics costs will be passed on from businesses to consumers, potentially affecting shopping behaviour during this period.

“Public expectations partially suggest they will economise during Ramadan, or not spend their entire holiday bonus (THR). The result is that the public restrains spending on secondary and tertiary goods during Ramadan. Consumption becomes suboptimal, whilst this is the momentum that businesses have awaited throughout the year,” he explained.

Another phenomenon, Bhima continued, is the reduction in duration of stay at hometown destinations, likewise driven by rising staple goods prices.

“Revenues for accommodation and transport businesses that should multiply several times may not meet initial plans,” said Bhima.

Because of this, he believes it is important for the government to ensure energy supply availability during the 2026 Ramadan break.

“The government must prepare supply, particularly outside Java. Perhaps during Ramadan, there will be no issues for the Java region. But in other areas, it must be ensured that queues do not form at petrol stations and LPG agent outlets,” he said.

Furthermore, Bhima noted that the implementation of work-from-anywhere (WFA) and work-from-home (WFH) policies for five days for both civil servants and private employees is also an alternative to reduce energy consumption.

“A reduction in fuel oil consumption if from a WFH policy is fine, provided there is a Wage Subsidy Assistance (BSU) to compensate for reduced working hours for employees. Do not let it be the case that because of WFH reasons, there then occur redundancies (PHK) because it is deemed that worker productivity has declined,” said Bhima.