Government Urged to Urgently Mitigate APBN Risks from Oil Price Breaching US$100 and US Dollar Strengthening
Jakarta – The government has been urged to immediately undertake fiscal mitigation measures to respond to surging global oil prices and the strengthening of the US dollar. This comes amid escalating geopolitical tensions between the United States, Israel and Iran in the Middle East.
Geopolitical tensions in the Middle East region have driven global oil prices above US$100 per barrel since Sunday 8 March 2026. Simultaneously, global pressures are reflected in the strengthening of the US dollar, which caused the Indonesian rupiah to breach the Rp17,000 per US dollar level at the beginning of trading on Monday.
M Sarmuji, Chairman of the Golkar Party Faction in Indonesia’s House of Representatives, stated that the combination of rising oil prices and US dollar strengthening poses significant pressure on Indonesia’s state budget (APBN). This is particularly concerning for energy subsidy allocations, which are highly sensitive to fluctuations in oil prices and exchange rates.
“The surge in global oil prices above US$100 per barrel and the strengthening of the US dollar must be responded to seriously by the government immediately. The impact on the APBN could be very significant, especially on the burden of energy subsidies,” Sarmuji said in Jakarta on Tuesday 10 March 2026.
Sarmuji also cautioned that US dollar strengthening has direct consequences for Indonesia’s foreign debt position. When the dollar strengthens against the rupiah, the value of Indonesia’s dollar-denominated debt obligations automatically increases when calculated in rupiah terms.
“The strengthening of the US dollar also directly increases the burden of Indonesia’s foreign debt in rupiah value. This means the government’s payment obligations become larger when converted to rupiah,” he said.
He further requested that the Ministry of Finance immediately conduct simulations of various scenarios so that the government can anticipate potential fiscal consequences should current global conditions persist.
“Finance Minister Purbaya Yudhi Sadewa must immediately carry out simulations and mitigation measures to ensure our APBN remains valid. The consequences for the APBN burden will certainly be high, especially in subsidies,” he said.
Sarmuji also emphasised that anticipatory measures need to be undertaken transparently and in a coordinated manner, given their broad impact on national economic stability.
“The Finance Minister should not be preoccupied with his own domain. A situation like this requires strong coordination and open communication so that the government, parliament and the public are aware of the mitigation measures being prepared,” he stressed.