Government Urged to Exercise Caution in Setting Fuel Prices Amid Global Dynamics
The Executive Director of the ReforMiner Institute, Komaidi Notonegoro, has urged the government to exercise caution in setting fuel (BBM) price policies amid uncertain global dynamics. He assessed that holding prices steady requires careful calculation to avoid disrupting national energy resilience.
He noted that amid the surge in global crude oil prices, maintaining stable BBM prices is indeed important to support public purchasing power. However, this approach carries consequences for the sustainability of energy supplies if not balanced with financing readiness and procurement.
“This is not a subsidy issue, but a matter of procurement sustainability that needs to be anticipated. More concerning is Pertamina’s financial capacity for procurement in the coming days,” Komaidi said during an energy discussion in Jakarta, quoted on Saturday (11/4/2026).
He explained that the assumption of Indonesia Crude Price (ICP) in the 2026 State Budget at US$70 per barrel is now trailing market prices approaching Brent. With the exchange rate remaining constant, the economic price differential for BBM is estimated at Rp5,000 to Rp9,000 per litre.
With national consumption volume around 80 million kilolitres per year and Pertamina’s market share nearing 90 per cent, the additional funding needed to cover this differential is substantial. Rough calculations indicate an additional requirement of Rp1.5 trillion to Rp2 trillion per day, or about Rp60 trillion per month.
“How long can they sustain this with existing cash flow? Moreover, there are maturing bonds, requiring payments of principal and interest,” Komaidi stated.
He warned that Pertamina’s dominance in national BBM distribution means supply disruptions risk directly affecting domestic energy availability. If the company cannot procure, national supplies could be disrupted.
According to him, the decision to hold prices can still be understood from an economic perspective. However, product availability remains the primary factor that cannot be compromised.
“If the product is unavailable, imagine SPBU fuel stations running empty. This would cause national gridlock in both economic and social contexts,” Komaidi emphasised.
He also stressed the importance of balancing populist policies with economic rationality to avoid damaging the national energy order.
“Policies may be populist, but they must be rational. If populist but irrational, that combination will destroy the order,” Komaidi said.
A member of the National Energy Council (DEN), Muhammad Kholid Syeirazi, assessed that current global pressures have placed the oil market in an abnormal condition. In such a situation, product availability becomes more important than mere financial capacity.
“Moreover, the current situation is a seller’s market, so the market is dictated by sellers,” Kholid said.
He viewed Pertamina’s position as increasingly pressured, having to face high global prices while being bound by the lower ICP assumption in the State Budget.
“What is the legal basis for providing BBM and crude at prices above ICP? Therefore, this condition needs to be watched closely,” Kholid stated.
An economist from the University of Indonesia, Dipo Satria Ramli, assessed that oil price pressures also have the potential to shake fiscal stability. Simulations show that if oil prices reach US$105 per barrel and the rupiah exchange rate is around Rp17,000, the State Budget deficit could widen to 3.6 per cent.
“We appreciate the government not raising subsidised BBM prices. However, economically, that burden shifts to Pertamina’s balance sheet,” Dipo said.
The Director of Oil and Gas Programme Development at the Ministry of Energy and Mineral Resources, Hendra Gunawan, stated that the government is beginning to expand energy supply sources to anticipate global distribution disruptions, including from areas outside the Strait of Hormuz route. This effort is accompanied by optimising domestic production through redirecting part of the supply for domestic needs.
Diversifying imports and strengthening domestic supplies are key to maintaining energy resilience amid global pressures. The government faces the need to balance price stability with guarantees of national energy availability.