CORE: Non-Subsidised Fuel Prices to Follow Market Increases

Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, stated that the price increases for several non-subsidised fuels are essential because they follow the market mechanism. Faisal explained that the Indonesian Crude Price (ICP) is currently surging to levels of $90 to $100 per barrel from around $60 per barrel before the war.

“This makes it very possible for non-subsidised fuels, whose prices are floating and not held back by the government, to rise in line with market prices,” Faisal said when contacted by Republika in Jakarta on Monday (20/4/2026).

Faisal conveyed that this new policy does not immediately relieve Pertamina’s burden, as the company still maintains prices for other non-subsidised fuels like Pertamax. Faisal said Pertamina is still covering the difference between the economic price of Pertamax.

“So I think this step will indeed erode Pertamina’s finances, but economically it will be safer, because it is raised carefully,” he stated.

Faisal said the price increases for non-subsidised fuels such as Pertamax Turbo, Dexlite, and Pertamina Dex are the right move. Faisal noted that this will not have a significant impact on purchasing power or inflation levels.

“The ones newly increased are non-subsidised fuels that, in terms of volume or value of consumption, are still relatively small. I see it’s below two percent of total fuel consumption,” Faisal continued.

Faisal explained that these types of non-subsidised fuels target the upper class with strong purchasing power. Moreover, he added, logistics transport will not be affected because it does not consume these types of non-subsidised fuels.

“The impact is limited to the upper class and not on vulnerable groups, inflation is also relatively limited because consumption is below two percent and does not affect logistics that use subsidised fuels extensively. So it’s safe so far,” Faisal said.

Faisal stated that a more significant impact would occur if there is an increase in Pertamax prices. Faisal said Pertamax is one of the fuels with substantial consumption levels.

“If eventually RON 92, Pertamax, rises, there is a high likelihood of a greater inflationary impact because consumption is above 10 percent,” Faisal said.