Regional Governments to Benefit from Falling Oil Prices, Here's Purbaya's Calculation

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has revealed that a potential drop in oil prices could provide room within the state budget (APBN). According to Purbaya, this fiscal space can be allocated for revenue-sharing funds (DBH). He has already asked the Director General of Budget to calculate the amount of savings from the oil price decline, which affects energy subsidies and compensation. With this room available, Purbaya estimates that transfers to regions (TKD) and DBH could be increased. However, he must first seek permission from President Prabowo Subianto. “Because I calculate the average world oil price at US$100 per barrel; if it falls to, say, US$75 to US$80 until the end of the year, there will certainly be leftover money. The remainder might be prioritised for the regions, but I must report to the President first,” Purbaya said during a working meeting with the Regional Representative Council (DPD RI) on Monday (22/6/2026). He is therefore confident the government can prepare additional fiscal space of around Rp40 trillion, potentially increasing to Rp90 trillion, adjusting to the state budget conditions while maintaining fiscal discipline for the regions. “The room for regions is open. There will definitely be an increase. The most important thing is how regional fiscal strengthening is carried out carefully without disrupting the government’s commitment to keeping the deficit prudent,” he stated.