Finance Minister Purbaya's Strategy to Pursue 6% Growth Despite Rising Oil Prices

Finance Minister Purbaya Yudhi Sadewa has confirmed that Indonesia’s economic growth can remain high amid elevated global oil prices. “Our economy can grow quite well, even though oil prices are high,” he said during CNBC Indonesia’s Economic Update 2026, quoted on Tuesday (23/6/2026). Purbaya explained that the resilience of Indonesia’s economic growth is achieved because the risk of high global oil prices has been absorbed by the state budget (APBN) acting as a shock absorber. The result is that public purchasing power is maintained. “Because when we absorb the negative shock from the world oil market, prices may not rise, and consequently public purchasing power remains preserved, so they can continue spending throughout the first five months of this year,” Purbaya stated. Global crude oil prices, both Brent and WTI benchmarks, have surged since late February, touching levels above US$110 per barrel. This is a consequence of the war between Iran and the United States and Israel, which led to the closure of the Strait of Hormuz, a key global crude oil trade route. When crude oil prices rise, the effect reaches the domestic market, where the Indonesian Crude Price (ICP) also soars. The ICP has recorded an upward trend since the beginning of 2026. By May 2026, the ICP reached US$106.56 per barrel, a 65% increase compared to the January 2026 ICP of US$64.41 per barrel. According to data from the Ministry of Energy and Mineral Resources, the ICP for January 2026 was recorded at US$64.41 per barrel, rising to US$68.79 per barrel in February 2026, then sharply increasing to US$102.26 per barrel in March 2026. The peak increase occurred in April 2026 at US$117.31 per barrel, before declining to US$106.56 per barrel in May 2026. Calculated on average over the first five months of 2026, the average ICP has reached US$91.86 per barrel. This has caused an increase in non-subsidised fuel prices, such as RON 92, RON 95, and RON 98. However, the government has not yet raised the price of subsidised fuels like RON 90 Pertalite, which is most widely used by the public for personal needs as well as transportation and goods logistics. Despite the fuel price increases, Purbaya previously stated he is targeting economic growth in the second quarter of 2026 to approach 6%. “The growth? 5.7. So in the second quarter, 5.7,” Purbaya said during a media briefing last April, quoted on Monday (22/6/2026).