Global Oil Price Projections Remain High, Purbaya Accelerates Electric Vehicles
JAKARTA, KOMPAS.com - Finance Minister Purbaya Yudhi Sadewa predicts that global oil prices will remain high as the conflict in the Middle East shows no signs of abating.
This situation is driving the government to accelerate incentives for electric vehicles in order to reduce imports of fuel oil (BBM) and energy subsidies.
Purbaya stated that high domestic BBM consumption poses a risk of burdening the State Revenue and Expenditure Budget (APBN), especially when global oil prices rise.
“Our BBM consumption will also remain high, with higher prices. So if I can shift to electricity, it will significantly reduce our BBM imports,” Purbaya said in Jakarta on Tuesday (12/5/2026).
For this reason, the government is preparing various incentives to speed up the adoption of electric vehicles domestically.
Purbaya admitted to being pessimistic that the geopolitical conflict in the Middle East will end soon.
He even assessed that the US negotiation approach towards Iran has not been sufficiently effective in lowering conflict tensions.
“We see that global oil prices won’t drop. After I went to America, I studied how America conducts discussions and designs the provisions given to Iran; it seems like a design for a country that lost a war,” he said.
Due to the prolonged conflict, global oil prices are expected to remain high, impacting oil-importing countries, including Indonesia.
Purbaya predicts that the conflict could begin to ease at the earliest in September 2026, approaching the US political agenda ahead of the November elections.
“The best case is for the Middle East conflict to end in September because there are elections in the United States. But it could continue indefinitely,” he said.
In addition to reducing BBM imports, Purbaya believes that accelerating the use of electric vehicles can help utilise the national electricity supply that has not been optimally absorbed.
He revealed that there is currently PLN electricity capacity that the government still pays for through the take or pay (ToP) scheme, even though it is not fully used.
“There is PLN electricity that we still pay for, but it’s not used. That’s probably around 70 percent capacity utilisation, so there’s still 30 percent of electricity that we pay for but don’t use,” Purbaya said.
According to him, greater electricity usage for electric vehicles will help reduce the energy subsidy burden while increasing the efficiency of the national electricity system.
“I want to use that so that the subsidies at PLN decrease, and BBM subsidies also decrease,” he stated.