Rupiah Strengthens Amid Calls to Tighten Fuel Subsidies Due to Surge in Oil Prices
Jakarta, VIVA – The rupiah exchange rate against the US dollar is predicted to remain volatile but closed weaker in trading today.
Based on data from the Jakarta Interbank Spot Dollar Rate or Jisdor BI, the rupiah rate against the US dollar stood at Rp17,092 on Tuesday, 7 April 2026. This position weakened by 55 points from the previous rate of Rp17,037 in Monday’s trading on 6 April 2026.
Meanwhile, in spot market trading on Wednesday, 8 April 2026 until 09:02 WIB, the rupiah was traded at Rp16,985 per US dollar. This position strengthened by 120 points or 0.70 percent from the previous level of Rp17,105 per US dollar.
Economic and money market observer Ibrahim Assuaibi stated that economists assess the commodity-based subsidy design opens loopholes for consumption by affluent groups. The energy subsidy scheme, which is not yet properly targeted, is in the spotlight amid the global oil price surge.
Subsidised fuel can still be accessed without clear restrictions. This condition means the subsidy distribution is not fully enjoyed by entitled groups and risks creating disparities in practice. Groups such as fishermen, who are entitled, may potentially face supply shortages.
The surge in world oil prices due to global conflicts delivers a severe blow to Indonesia’s fiscal condition amid high dependence on fuel imports. The price increase far above the state budget assumptions has enlarged the energy subsidy burden.
Oil prices have exceeded the 2026 state budget assumption of US$70 per barrel. The rise to around US$113 per barrel is triggering significant pressure on the state budget.
Ibrahim emphasised that the focus of subsidy targeting must be sharpened. When oil prices surge to US$113 per barrel, which is more than 60 percent above the state budget assumption, fiscal pressure is immediately felt through subsidy swelling and compensation.
On the other hand, the government’s fiscal space is deemed increasingly limited to dampen such shocks. Energy price increases risk widening the deficit if not balanced by efficiency measures. Adjusting fuel prices is not an ideal option in the short term.
Public purchasing power remains weak, so such policies could potentially add economic pressure. As an alternative, the government is encouraged to implement spending efficiency and budget reallocation. This step is considered more realistic to maintain fiscal stability amid the global oil price surge.