Ministry of UMKM: Iran-US conflict drives up selling prices for SMEs
Jakarta — Indonesia’s Ministry of Micro, Small, and Medium Enterprises (UMKM) has assessed that the geopolitical conflict between Iran and the United States, which has triggered a surge in global oil prices, could potentially affect the selling prices of UMKM products domestically.
The Deputy Minister for Small Business at the UMKM Ministry, Temmy Satya Permana, stated that the current global oil price of $117 per barrel has already exceeded the 2026 state budget assumption of $70 per barrel.
“This increase in oil prices will likely drive adjustments to energy subsidies and impact the prices of essential goods. If the prices of basic goods rise, then the cost of goods sold by SMEs will also increase,” Temmy said during a media briefing in Jakarta on Tuesday.
He added that the UMKM sectors most affected by the rise in oil prices are those in services, particularly transport and distribution, due to their dependence on fuel consumption.
According to him, when petrol prices rise, the costs of transport and distribution services will also increase. This situation ultimately drives up the prices of essential goods, and the public will bear the direct impact of these price surges.
Temmy stated that the government has committed to holding subsidised fuel prices in place and preventing them from rising in the near term.
He believes this situation serves as an important reminder for SMEs to strengthen the domestic market to remain resilient amid global turbulence.
Earlier, Finance Minister Purbaya Yudhi Sadewa stated that there are no plans to increase subsidised fuel prices amid the rise in global oil prices resulting from the Iran-US-Israel conflict.
Purbaya emphasised that the government still needs approximately one month to evaluate potential adjustments to the state budget.
“To date, there is no policy to change fuel subsidies, in the sense of raising fuel prices,” Purbaya told journalists in Jakarta on Monday (9 March).
Sensitivity analysis of the 2026 state budget indicates that every $1 increase in Indonesian crude oil prices per barrel could potentially add up to Rp6.8 trillion to the budget deficit. In the 2026 state budget, the Indonesian crude oil price assumption is set at $70 per barrel.