Global Oil Price Volatility: Government Urged to Anticipate Budget Pressures
JAKARTA — The chairman of the Golkar Party faction in the Indonesian House of Representatives, M Sarmuji, has called on the government to take immediate fiscal mitigation measures in light of the volatility in global oil prices and the strengthening of the US dollar amid escalating geopolitical tensions between the United States, Israel, and Iran.
Geopolitical tensions in the Middle East region pushed global oil prices above $100 per barrel beginning Sunday, 8 March 2026. Simultaneously, global pressures were reflected in the strengthening of the US dollar, which caused the rupiah exchange rate to breach the Rp 17,000 per dollar level at the opening of trading on Monday, 9 March 2026.
“The surge in global oil prices above $100 per barrel and the strengthening of the dollar must be responded to seriously by the government. The impact on the state budget could be very significant, particularly on the burden of energy subsidies,” Sarmuji stated in a written statement, as quoted on Tuesday, 10 March 2026.
Beyond this, Sarmuji cautioned that the strengthening of the US dollar also carries direct consequences for Indonesia’s foreign debt position. When the US dollar strengthens against the rupiah, the value of debt obligations denominated in US dollars automatically increases when calculated in rupiah terms.
He called on the Ministry of Finance to immediately conduct simulations of various scenarios so that the government can anticipate the fiscal consequences that may emerge if the global conditions persist.
“Finance Minister Purbaya Yudhi Sadewa must immediately conduct simulations and implement mitigation measures to ensure our state budget remains valid. The consequences for the budget burden will certainly be significant, particularly regarding subsidies,” Sarmuji said.
Sarmuji also emphasised that such anticipatory measures need to be undertaken openly and in a coordinated manner, given their broad impact on national economic stability.
He added that the Golkar Party faction in the House of Representatives will continue to monitor developments in the global situation that could affect the national economy.
According to him, the government’s readiness in identifying risks early is important for safeguarding Indonesia’s economic resilience amid global geopolitical turbulence.
“Global turbulence cannot be avoided, but its impact on the national economy must be managed well. That is why anticipatory measures must be implemented immediately,” he concluded.