Indef Assesses Pertamax Price Hike Impact on Purchasing Power
The Institute for Development of Economics and Finance (Indef) assesses that the main impact of the Pertamax price increase does not stem from inflationary pressure, but rather from its effect on public purchasing power. The primary impact will target the middle class, who are the main users of this fuel.
Indef’s Head of Macroeconomics and Finance, M. Rizal Taufik Taufikurahman, stated that with Bank Indonesia’s benchmark interest rate at 5.50 percent, a weakening rupiah exchange rate, and rising living costs, the Pertamax price hike has the potential to increase household transportation expenditure burdens. This situation is considered likely to reduce real public income and restrain the pace of domestic consumption, which has historically contributed more than 50 percent to Indonesia’s gross domestic product (GDP).
“The greater impact actually occurs on public purchasing power, particularly the middle class as the main users of Pertamax,” Rizal told Tempo on Friday, 12 June 2026. Therefore, according to him, the biggest risk from the Pertamax price increase is not an inflation spike, but rather the weakening of public purchasing power and a slowdown in consumption, which is one of the main engines of economic growth.
On the other hand, Rizal estimates the direct impact of the Pertamax price increase on inflation to be relatively limited. Pertamax is not the primary fuel used by public transport or logistics distribution, so its contribution to general inflation is not as large as subsidised fuels.
Nevertheless, the Pertamax price increase, which reached 32.1 percent, still has the potential to trigger second-round effects. The increase could raise operational costs in the services, transportation, and micro, small, and medium enterprise (MSME) sectors, as well as drive inflation expectations amid annual inflation that had already reached 3.08 percent in May 2026.
Rizal noted that the experience of the Pertamax price increase in December 2025, when the fuel price reached Rp12,750 per litre, showed that the policy did not become the main trigger for a national inflation spike. However, even though Pertamax prices fell again in January and February 2026, the price increase still pressured the transportation and services sectors through business cost adjustments.
Thus, Rizal assesses that the greatest impact of the Pertamax price increase does not come from a direct influence on the Consumer Price Index (CPI), but rather from the gradual adjustment of goods and services prices as business operational costs rise.
Previously, PT Pertamina Patra Niaga increased the prices of Pertamax and Pertamax Green fuel products on Wednesday, 10 June 2026. The non-subsidised fuel prices that rose include Pertamax (RON 92), from Rp 12,300 to Rp 16,250 per litre, and Pertamax Green 95 (RON 95), which rose from Rp 12,900 to Rp 17,000 per litre.
“The price adjustment for Pertamax and Pertamax Green was carried out after an evaluation process in accordance with the price formula set by the government,” said Pertamina Patra Niaga Corporate Secretary Roberth M.V. Dumatubun in a written statement.
The increase in Pertamax and Pertamax Green fuel prices, according to Pertamina, was decided after coordination with the government as the regulator. Additionally, the pricing decision was made in accordance with a periodic evaluation mechanism considering developments in world oil prices and economic market prices. Roberth explained that the non-subsidised fuel price adjustment was carried out in accordance with applicable regulations.