Purbaya: Government's Policy to Maintain Fuel Subsidies Successfully Controls Inflation

Finance Minister Purbaya Yudhi Sadewa stated that inflation in April 2026 was 0.13% month-to-month (mtm), which he considers sufficiently controlled. Meanwhile, year-on-year (yoy) inflation for April 2026 was recorded at 2.42%. Purbaya said that inflationary pressures are now easing in line with the normalisation of policies pursued by the government. The government’s efforts to maintain fuel subsidies amid geopolitical turmoil have, in his view, successfully helped dampen inflation spikes, particularly in the energy sector. Purbaya explained that the government’s decision to continue fuel subsidies was carefully calculated. If energy subsidies were removed while global oil prices were still rising, inflation could surge and negatively impact the public. “But if we let oil prices float, with fuel prices following global oil prices, inflation would certainly rise sharply, and purchasing power would be eroded; the oil effect would add significantly,” Purbaya said at the Ministry of Finance in Jakarta on Monday, 4 May 2026. “That’s the reason why we are holding back some of the fuel subsidies,” he added. He also stated that releasing fuel subsidies would not only affect inflation but could also suppress public purchasing power, ultimately leading to economic slowdown. “Our calculation is which is better: we subsidise or we remove the subsidy. There’s a lot of money, I spend it, but the economy collapses because it’s hard to control,” he said. It is known that previously the Central Statistics Agency (BPS) reported that Indonesia’s inflation in April 2026 reached 2.42% year-on-year (yoy). This is reflected in the rise of the Consumer Price Index (CPI) from 108.47 in April 2025 to 111.09 in April 2026. Month-to-month, inflation in April 2026 was recorded at 0.13% (mtm).