CORE: Middle Class Most Affected by Fuel and LPG Price Hikes

Executive Director of the Center of Reform on Economics (CORE), Mohammad Faisal, assesses that the price increases for fuel and non-subsidised LPG will most heavily burden the middle class. According to him, the greatest pressure is felt from the surge in non-subsidised LPG prices, which have been used by the majority of households in this group.

Faisal said this increase directly hits the daily expenditures of the middle class. Meanwhile, the impact of non-subsidised fuel price hikes is relatively limited for the middle class. This is because the types of fuel seeing significant increases are high-specification ones, such as RON 98 and above, which are generally consumed by upper-class groups.

“For non-subsidised fuel that is rising, such as RON 98 and above, the impact on the middle class is relatively small. The consumers are mostly upper class,” said Faisal when contacted on Monday, 20 April 2026.

The price increase for avtur also has the potential to impact through higher airfares, which in turn affects the mobility and expenditures of this group.

Overall, Faisal said, energy price increases will pressure the purchasing power of the middle class and ripple into the production sector. This is because the consumption of the middle group is the main pillar of economic activity.

In the short term, Faisal emphasised the importance of maintaining food price stability so that the pressure on the middle class does not become even heavier. He assessed that the government’s policy of not raising subsidised fuel prices is correct to curb inflation, particularly in the food sector.

“If subsidised fuel prices are raised, it usually impacts food inflation, and that would pressure the middle class even more,” he said.

Meanwhile, in the medium to long term, he said the government needs to focus on strengthening the income side of society, especially through the creation of formal employment. According to Faisal, the middle class has faced pressure in recent years and has even tended to shrink since the pandemic.

“Government programmes need to target job creation, especially formal ones, because that most affects the purchasing power of the middle class,” he said.

Previously, PT Pertamina Patra Niaga raised the price of 12 kg non-subsidised LPG from Rp 192,000 to Rp 228,000 per cylinder, an increase of around 18.75 per cent. This adjustment is the first since 2023 and took effect on 18 April 2026.

Price increases also occurred for 5.5 kg non-subsidised LPG, from Rp 90,000 to Rp 107,000 per cylinder, an increase of around 18.89 per cent. Pertamina also raised prices for non-subsidised fuels Dexlite, Pertamina Dex, and Pertamax Turbo.