Purbaya: Government Will Not Raise Fuel Prices

Jakarta — Finance Minister Purbaya Yudhi Sadewa has assured that the government currently has no plans to raise the price of subsidised fuel (BBM), despite crude oil prices surging as a result of the conflict between Iran, the United States, and Israel.

“No, we will not raise fuel prices,” said Purbaya following a limited coordination meeting chaired by Coordinating Minister for Economic Affairs Airlangga Hartarto in Jakarta on Monday (16 March 2026).

Purbaya emphasised that during the coordination meeting, the government confirmed that the state budget (APBN) would continue to function as a shock absorber against the surge in global crude oil prices caused by the conflict.

The rise in global crude oil prices, which briefly exceeded US$100 per barrel and surpassed the 2026 APBN assumption of around US$70 per barrel, can still be absorbed by the state budget due to the government’s strong fiscal resilience.

“So when the global oil price rises, if we raise it directly and pass it through to fuel prices, that slows down the economy, doesn’t it? It affects purchasing power, doesn’t it? It certainly does. So the APBN and government absorb it first,” Purbaya asserted.

This approach is why fuel prices in Indonesia remain relatively stable despite volatile global crude oil prices, particularly after one major global oil trade route, the Strait of Hormuz, was disrupted due to the Iran-US-Israel conflict.

“So there is no volatility abroad, is there? That is because the government is absorbing the cost increase,” he said.

Purbaya confirmed that the government’s state budget has sufficient resilience to respond to pressure from global crude oil prices. However, he was reluctant to specify how long it could sustain the current fuel price freeze if crude oil prices remained above macroeconomic assumptions.

“As far as I am concerned, we can hold on indefinitely,” Purbaya asserted, whilst making a strong gesture with his clenched fists.