Middle Class Allocates the Highest Share of Energy Expenditure

The Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM UI), has revealed that the middle class allocates the highest proportion of energy expenditure compared to other economic classes. This statement is based on the results of the National Socio-Economic Survey by the Central Statistics Agency (BPS) in 2025.

“The middle class records the highest proportion of energy expenditure at 8.86% of total expenditure,” wrote LPEM UI researcher Jahen F. Rezki and colleagues in the Indonesia Economic Outlook Q2-2026 report.

After the middle class, the aspiring middle class has an energy expenditure proportion of 8.18%. Below them are the upper class (7.15%), the vulnerable class (7.07%), and the poor (6.28%), who have the smallest expenditure.

According to the LPEM UI report, these figures indicate that the aspiring middle class and middle class are potentially bearing the largest proportional burden from energy price increases or subsidy reforms. These two economic classes are also in a difficult position.

“This group is generally not covered by social assistance programmes, so energy price increases can cause multiplier effects,” wrote Jahen and colleagues.

Meanwhile, the lower proportion of expenditure among poor households does not mean their vulnerability is lower. On the contrary, it reflects a more limited consumption basket, greater dependence on subsidised energy, and narrower room for budget adjustments when prices rise.

The report states that energy price increases make the distribution of energy expenditure burden across income groups increasingly important to monitor. At the international level, energy expenditure in Indonesia records a proportion of 8.3% of total household expenditure. This figure is higher than in Mexico, Japan, South Africa, and several developed countries.

This condition illustrates that energy needs already absorb a substantial portion of household budgets, even before the full impact of commodity price shocks. “Thus, further energy price increases could cause real welfare impacts, even without full adjustments to domestic fuel oil (BBM) prices,” wrote Jahen and colleagues.

Currently, the threat of energy price increases—particularly BBM—stems from the war between Iran and the United States-Israel since 28 February 2026. Global crude oil prices have reached above US$100 per barrel, exceeding Indonesia’s Crude Price assumption of US$70 per barrel according to the 2026 State Revenue and Expenditure Budget (APBN).