Ministry of Energy Discusses Impact of Rupiah Depreciation on Fuel Subsidies
The Ministry of Energy and Mineral Resources is currently discussing the impact of the rupiah’s weakening exchange rate on oil imports and fuel subsidies (BBM). Director General of Oil and Gas Laode Sulaeman stated that the government has not yet issued any new fiscal policies in response to the exchange rate pressures.
“So, the Minister of ESDM (Bahlil Lahadalia) along with his team of ministers is deliberating on this matter. We’ll just wait and see how it develops,” Laode said when met at the Ministry of ESDM on Wednesday, 13 May 2026.
On the other hand, Laode assured that the national fuel reserves are still in a safe condition, sufficient for 23 to 26 days. According to him, Indonesia has not faced an energy crisis situation like that in several other countries.
He assessed that this is evident from the high level of public activity, including traffic jams on the roads. “I still get stuck in traffic every day, whereas in other countries people are already walking. That means our energy reserves are still available,” he said.
Currently, Indonesia still imports around 1 million barrels of oil per day or about 20 million kilolitres of BBM per year. Imports are necessary because domestic oil production is only around 605,000 to 610,000 barrels per day, far below national consumption of 1.6 million barrels per day.
The large volume of imports has increased the energy subsidy burden in the 2026 state budget to Rp 210 trillion, up 14.24 per cent from the 2024 realisation of Rp 183.9 trillion.
Economist from Andalas University, Syafruddin Karimi, said that the rupiah’s weakening will drive up the prices of imported goods and gradually trigger inflation.
At yesterday’s market close, the rupiah weakened to Rp 17,528 per US dollar, down 114 points from the previous day. According to Syafruddin, if the rupiah remains at the Rp 17,000 per US dollar level for a long time, the pressure on people’s living costs will become more pronounced.
“Poor households and the middle class will bear the heaviest burden because their spending is concentrated on food, transportation, and routine needs,” said Syafruddin.
This pressure is seen as even greater because global energy prices remain high. Brent crude oil prices were recorded at US$96.48 per barrel, while West Texas Intermediate (WTI) reached US$98.72 per barrel. Rising energy prices usually quickly spread to transportation and distribution costs, then drive up prices of goods in traditional markets as well as modern retail.