Global Oil Prices Slump, DEN Confident Pertamax Price Will Fall Again
The National Economic Council (DEN) assesses that the peace agreement between the United States and Iran has contributed to the decline in global oil prices. DEN member Mochammad Firman Hidayat is optimistic about the consistency of current global oil prices, suggesting that fuel prices could be readjusted accordingly.
“We have seen prices drop from US$80 per barrel. The prices in April were high due to the discrepancy between product prices and crude oil,” said Firman when met at the Ministry of PPN/Bappenas office in Jakarta on Wednesday.
Given these conditions, he believes non-subsidised fuel prices could decrease soon. “For non-subsidised diesel and Pertamax, if crude remains below US$80, there will automatically be further adjustments,” he explained.
He noted that such adjustments are important to narrow the price gap between non-subsidised and subsidised fuels. He believes the government is being cautious to prevent users from switching from Pertamax to the subsidised Pertalite.
If the decline in global oil prices remains consistent, the DEN projects average global oil prices this year to be in the range of US$80-US$85 per barrel. This is lower than previous simulations which accounted for prices up to US$90 or even US$100. If prices remain below US$80 until the end of the year, the estimate for 2026 would be around US$80-US$85 per barrel.
“This means the difference from the State Budget (APBN) assumption of US$70 is relatively manageable, with only a US$10-US$15 margin. Therefore, we are confident that the fiscal position will remain secure, and we can maintain the deficit below 3%,” he concluded.
However, a drop in global crude prices does not automatically lead to an immediate reduction in domestic non-subsidised fuel prices. Any policy adjustment is considered ideal if communicated through a comprehensive official forum. The previous increase in Pertamax prices was viewed as an adjustment to global conditions, particularly rising energy costs and the weakening of the Rupiah.
Minister of Energy and Mineral Resources, Bahlil Lahadalia, has emphasised that the prices of subsidised fuel and LPG will not rise despite global geopolitical dynamics. Previously, Pertamina Patra Niaga increased non-subsidised fuel prices on 10 June, with Pertamax rising from Rp12,300 to Rp16,250 per litre and Pertamax Green 95 from Rp12,900 to Rp17,000 per litre.