Indonesian Government Says Subsidised Prices Will Stay Stable Until Year-End

Jakarta moves to calm public fears as global oil prices rise amid Middle East conflict

Indonesia says subsidized fuel prices will remain unchanged until the end of 2026, signaling that the government is prepared to absorb higher global oil costs to protect households from further pressure.

Subsidized Fuel Prices to Stay Unchanged

Finance Minister Purbaya Yudhi Sadewa said the government will not raise subsidized fuel prices until the end of this year, even as global oil prices continue climbing due to the escalating US-Israel conflict with Iran. Speaking during a working meeting with House Commission XI in Jakarta on April 6, he said the calculation had already been made using an assumption of oil staying at US$100 per barrel through year-end.

Non-Subsidized Fuel Still Depends on the Market

While the government is holding the line on subsidized fuel, Purbaya said it cannot guarantee the same for non-subsidized fuel prices because those products do not receive government price support. That means public concern is likely to remain focused on broader energy costs, even though the state is trying to shield lower- and middle-income consumers through the subsidy system.

Government Says Budget Buffers Are Still Available

Purbaya said the government has already prepared mitigation steps and tested the strength of the state budget under scenarios where oil reaches US$80 or US$100 per barrel. He added that beyond the annual budget, the government still has access to other financial buffers, including the Sisa Anggaran Lebih, or SAL, which stands at Rp420 trillion. Using your required conversion, that is approx. S$33.60 billion. He said Rp200 trillion of that is placed in the banking system, equal to approx. S$16.00 billion.

Energy Revenue and Spending Cuts to Support the Plan

According to Purbaya, the government also expects extra non-tax state revenue from the energy and mineral resources sector to help cushion subsidy needs. He said Energy Minister Bahlil Lahadalia had indicated that higher oil and coal prices could generate stronger revenue. At the same time, the government is trying to cut inefficient spending across ministries and agencies, especially because every US$1 increase in oil prices requires an additional Rp6.8 trillion in subsidies, or approx. S$544.00 million.

Deficit Target Remains a Key Concern

Purbaya said the government’s efficiency efforts are also aimed at keeping the budget deficit at 2.92 percent without having to rely on the SAL reserve. That makes the fuel subsidy decision not just a social policy choice, but also a major fiscal balancing act. The administration is now trying to maintain public confidence, preserve spending discipline, and increase revenue from selected sectors at the same time.

Indonesia’s decision to keep subsidized fuel prices unchanged reflects how politically and economically sensitive energy costs remain for the country. For Indonesians, the policy offers short-term relief and reassurance at a time of global uncertainty, but it also places greater pressure on the state budget to stay resilient. For Singaporeans watching the region, the move highlights how rising oil prices are forcing Southeast Asian governments to weigh public protection, fiscal discipline, and long-term energy stability all at once.

Sources: Batampos (2026) , CNA ID (2026)

Keywords: Indonesia Fuel Subsidy, Purbaya Yudhi Sadewa, Subsidized Fuel, Global Oil Prices, APBN, Energy Revenue, Budget Deficit