Global Oil Prices Rise; Commission XI Urges Government to Prepare Budget Cushion

JAKARTA — Muhammad Misbakhun, chair of Commission XI of the Indonesian House of Representatives, has called on the government to prepare a financial “cushion” for the state budget in light of rising global crude oil prices.

Misbakhun noted that tensions arising from Iran’s conflict with Israel and the United States, which has led to the closure of the Strait of Hormuz, saw global oil prices spike to $100 per barrel on Monday, 9 March 2026, before declining to $80 per barrel on Tuesday, 10 March 2026.

“What does this mean? It means the government must prepare multiple scenarios — scenarios that provide a cushion for our state budget,” Misbakhun said when met at the Parliament Complex in Senayan, Jakarta, on Tuesday.

He noted that the government had based its budget on an assumption of global crude oil prices at $70 per barrel. “When prices exceed $70, there are naturally risks involved,” he said.

The Golkar politician argued that responses to oil price volatility should not be limited to raising domestic fuel prices. He called on the government to first conduct a thorough review of the components determining subsidised fuel pricing.

“We will examine more deeply what factors exist before the government takes action,” he said.

Misbakhun suggested a moderate approach in which the burden of rising global oil prices is shared between consumers and the state. “But at certain levels, if the state can still absorb this, then the state should take it on to protect people’s purchasing power and prevent inflation,” he said.