Global Energy Price Volatility Must Be Addressed Proportionally
JAKARTA – Fluctuations in non-subsidised fuel oil (BBM) prices are considered a consequence of global energy market dynamics influenced by geopolitical conditions and world crude oil price movements. Amid various spotlights on government policy, the public is asked to understand energy price changes comprehensively so as not to be detached from the underlying economic context.
Constitutional economist Defiyan Cori said the increase in non-subsidised fuel prices, including the Pertamax Series, often triggers public complaints. However, when prices fall, the public response is generally not as significant as when they rise. According to him, this condition is part of the market mechanism influenced by the balance of supply and demand. “Changes in commodity prices are commonplace in economic theory,” Defiyan said in a statement some time ago.
He explained that Article 33 Paragraph (2) of the 1945 Constitution mandates the state to be present in sectors that control the livelihoods of many people, including energy. However, fuel prices are still influenced by world crude oil price developments because national oil production cannot yet meet all domestic needs.
According to Defiyan, global geopolitical tensions, including conflicts involving the United States, Israel, and Iran, have put pressure on world oil prices. Therefore, the adjustment of non-subsidised fuel prices is a consequence that cannot be separated from international energy market developments. “Price adjustments are also part of efforts to support the energy self-sufficiency target,” he said.
He added that the government continues to maintain subsidised fuel prices so that people’s purchasing power is preserved. On the other hand, the distribution of subsidies also needs to be monitored to ensure they are on target. “Do not let elite groups enjoy subsidies that should be given to people in need,” he said.
Meanwhile, Kata Rakyat Executive Director Alwan Ola Riantobi assessed that the delivery of aspirations regarding economic policies should prioritise constructive dialogue. According to him, the government has opened communication channels for various inputs, including from students. “Indeed, the escalation of student demonstrations also needs to be examined, whether their demands are based on in-depth studies and research. We hope there are no elements who ride on student actions to undermine the government. So if the government has committed to improving and opening dialogue spaces, the escalation of mass actions should decrease and be stopped,” he said.