Rupiah Weakens to Rp 17,350 Amid Potential Fuel Price Hike Due to High Fiscal Pressures

Jakarta, VIVA – The rupiah exchange rate against the US dollar is predicted to remain volatile but closed stronger in today’s trading.

Based on data from the Jakarta Interbank Spot Dollar Rate (Jisdor) from Bank Indonesia, the rupiah rate against the US dollar stood at Rp 17,362 on Thursday, 7 May 2026. This position represented a strengthening of 43 points from the previous rate of Rp 17,405 on Wednesday’s trading, 6 May 2026.

Meanwhile, in spot market trading on Friday, 8 May 2026, up to 09:02 WIB, the rupiah was traded at Rp 17,350 per US dollar. This position weakened by 17 points or 0.10 percent from the previous position at Rp 17,333 per US dollar.

Economic and money market observer Ibrahim Assuaibi stated that the potential for fuel price adjustments is increasingly open as fiscal pressures rise due to the surge in global energy prices, coupled with subsidy burdens that could exceed the state budget assumptions.

The heating global geopolitical situation is keeping energy prices at high levels for an extended period. This situation is also driving up the crack spread component, namely the difference between crude oil prices and its derivatives such as fuel.

With the crack spread remaining high, subsidy costs could be larger than the government’s calculations in the state budget. This constrains fiscal capacity. If world oil prices, as reflected in benchmark prices like Brent, remain at US$120 per barrel for several months, then fuel price adjustments become something that is hard to avoid.

In such conditions, the government actually has room to adjust subsidised fuel prices. However, this option is considered a last resort given its impact on people’s purchasing power.

With this fiscal limitation, the most sensible step for the government is to complete unfinished business, namely deregulation. This is important to maintain the continuity of industry.

In addition, the government is also striving to sustain industry, particularly by increasing domestic production through downstream processing. If energy-based raw materials can be produced locally, industries in Indonesia can reduce their reliance on imports.

The current situation presents an opportune time for all parties to improve. This includes introducing more environmentally friendly energy for use by both the public and the industrial sector.