CORE: Pertamax price drop provides positive sentiment for inflation

Economist Yusuf Rendy Manilet from the Center of Reform on Economics (CORE) stated that the reduction in the price of Pertamax in August 2026 provides positive sentiment for inflation. “The decline in non-subsidised fuel prices can strengthen the trend of moderating inflation in the coming months, especially through the administered price component,” Yusuf said when contacted from Jakarta on Monday. He noted that inflation has already eased to 2.88 percent annually in July, accompanied by monthly deflation. “The benefits are most felt by the middle class, who are the main users of Pertamax. Operational costs for private vehicles and some MSMEs become slightly lighter,” Yusuf said. Thus, the decline in non-subsidised fuel prices can help maintain purchasing power, which had been under pressure following the price increase in June. “The impact is not yet a significant game changer, but it still provides support for household consumption,” Yusuf said. However, Yusuf assessed that the impact of the non-subsidised fuel price reduction on national inflation is likely not very large. He said non-subsidised fuel has a relatively small weighting in the Consumer Price Index basket compared to subsidised fuel. Therefore, the direct influence on overall inflation tends to be limited. PT Pertamina (Persero) announced that the price of non-subsidised Pertamax fuel fell from Rp16,250 in July to Rp15,950 per litre starting 1 August. VP Corporate Communication of Pertamina Patra Niaga, Kitty Andhora, stated that the reduction in non-subsidised fuel prices was carried out in accordance with government regulations and directives, considering global oil price trends, the rupiah exchange rate, and public purchasing power. Besides Pertamax, prices for other non-subsidised petrol types also decreased, with Pertamax Turbo dropping from Rp19,300 per litre to Rp18,300 per litre, and Pertamax Green 95 falling from Rp17,000 per litre to Rp16,600 per litre. Meanwhile, Pertamina Dex remained at Rp21,150 per litre and Dexlite remained at Rp19,700 per litre. These prices apply to regions with a Vehicle Fuel Tax of 5 percent, such as DKI Jakarta.