Global oil prices rise, government says subsidised fuel prices have not been raised
Jakarta — Coordinating Minister for Economic Affairs Airlangga Hartarto said the government has not yet raised the price of subsidised fuel amid a surge in global oil prices driven by geopolitical tensions in the Middle East. He said the government is still monitoring developments in the region and the impact on world crude prices before taking further policy steps. ‘Not yet (to raise subsidised fuel prices). Our macro assumption for the state budget yesterday was US$70 per barrel (ICP). So we’ll just wait,’ he said in Jakarta on Thursday (5 March 2026).
Airlangga explained that the government is currently preparing several scenarios to anticipate potentially prolonged impacts from the conflict. ‘Until when? The war could last three months, six months, or longer. So we are each preparing a scenario,’ he said.
Echoing Airlangga, Energy and Mineral Resources Minister Bahlil Lahadalia said subsidised fuel prices for Pertalite will not rise, even though world oil prices have surged due to the US-Israel and Iran conflict.
‘If the price of subsidised fuel, the Pertalite petrol, goes up by any amount, the price remains the same before any government change,’ Bahlil said at a press conference on ‘Latest Developments in the Middle East and Implications for the ESDM Sector’, held at the ESDM Ministry offices, Jakarta.
Meanwhile, for non-subsidised fuels such as Pertamax, there will be price adjustments; their price will rise in line with fluctuations in world crude prices. Bahlil noted that the price of oil has risen to US$78-80 per barrel, exceeding the macro assumption in the 2026 State Budget of US$70 per barrel.
As an oil-importing country of around 1 million barrels per day, increases in world oil prices place a burden on the state budget with the potential for higher energy subsidies that must be funded by the country.
However, on the other hand, Indonesia also earns additional revenue from the rise in world oil prices from its production. ‘Because Indonesia contributes around 600 thousand barrels per day. Well, this difference is what we are calculating,’ Bahlil said.
According to Bahlil, the calculation will be done carefully given the domestic energy subsidy in the country.
To date, after a National Energy Council meeting, the government has not planned to increase subsidised fuel prices. ‘As of our meeting just now, there has been no (increase in subsidised fuel prices), so all is well. Wishing you a happy Eid and a blessed fasting season; God willing, there has been no increase in subsidised fuel prices,’ Bahlil said.