Oil Prices Surge, Finance Minister Purbaya Opens Up the Option of Raising Subsidised Fuel Prices

JAKARTA — The government is considering the possibility of adjusting the price of subsidised fuel oils (BBM) if global oil prices continue to soar and begin to burden the State Budget (APBN). The rise in global energy prices is seen as potentially widening the fiscal deficit if policy adjustment measures are not taken. Finance Minister Purbaya Yudhi Sadewa said the government has conducted simulations of various global oil price increase scenarios. In the calculations, if the average oil price reaches around USD 92 per barrel, the budget deficit could rise significantly. ‘If oil prices rise to USD 92 per barrel, what is the impact on the deficit? If we do nothing, the deficit would rise to 3.6 to 3.7 percent of GDP,’ Purbaya said at a press briefing with reporters at the Ministry of Finance on Friday (6 March 2026). One of the steps being prepared is to adjust state spending. However, if pressure on the APBN intensifies, the government does not rule out sharing the burden with the public through an increase in subsidised BBM prices. ‘If indeed the budget is not strong at all, there is no other way, then we share with the public partly. In other words, there will be an increase in BBM if indeed,’ he said. In addition to the BBM price adjustment option, the government is also preparing steps to realocate state spending. Programs deemed not urgent could be postponed or shifted to next year to safeguard fiscal health. Purbaya emphasised that the government will prioritise spending that has a direct impact on the public. Meanwhile, expenditures that do not significantly support essential needs can be postponed, such as the procurement of goods or certain projects.