Purbaya Frankly Explains Why the Government Prefers Not to Raise Fuel Prices, Here Are the Considerations

Jakarta, VIVA – Finance Minister Purbaya Yudhi Sadewa has candidly discussed the reasons why the government prefers not to raise the prices of subsidised fuel and instead increase the subsidy allocation, even though it will deplete state coffers, rather than raising prices which would not drain the budget as much for additional subsidies.

He admitted that the debate on this issue has long been a discourse among economists, particularly regarding the comparison of efficiency that can be achieved between the government and the public in managing state finances.

“Clearly, when fuel prices rise, the cost of living for many people, especially the lower-income ones, will be disrupted. Secondly, from an economic perspective, it’s just transferring the money. If I raise the fuel prices, the money becomes mine. But the people have to pay more. That slows down the economy,” said Purbaya during a conversation with the media in the Ministry of Finance area, Jakarta, on Tuesday, 7 April 2026.

“My money, I will spend it. If I’m as skilled as the public in spending that money, growth won’t disappear,” he stated.

However, Purbaya also questioned who is actually more efficient in allocating spending with that money, whether it’s the government or the public.

“Perhaps in the short term, the public is more efficient (in spending that money). So I think that’s one of the calculations, the economic consideration (for deciding to keep fuel prices from rising),” said Purbaya.

In addition, Purbaya continued, by not raising fuel prices, people’s purchasing power will remain maintained because their expenditures won’t surge.

Thus, it will actually create efficiency in society because they will be more inclined to spend their money according to needs, rather than spending it on the impacts of fuel price increases.

“So it’s not just that, but who is more efficient? (For example) You (have) a salary of Rp 1,000, I (the government) take Rp 500. I spend (Rp 500), you spend all Rp 500,” said Purbaya.

“Compared to you (having) a salary of Rp 1,000, I take Rp 900 (by raising fuel prices). You have Rp 100, you spend Rp 100, I take more than Rp 400. Now, will I spend that more than Rp 400 better than you (the public) spending? Almost certainly not. Because they (the public) will spend according to their needs, so it’s just right,” said Purbaya.