Unexpected Remarks from Industry Minister on Electric Vehicle Tax and Rising Fuel Prices

Jakarta, CNBC Indonesia - Industry Minister Agus Gumiwang Kartasasmita stated that the impact of the diesel fuel price increase and the latest electric vehicle tax regulations. Agus said that every cost increase will certainly affect sales. On the other hand, he emphasised that the industry or companies must already have anticipation measures. “Like it or not, our fuel prices are rising due to the war, and we hope that this will not last long,” he told reporters in Jakarta on Tuesday (21/4/2026). “Diesel will also be based on market price. But I think, I am confident that the automotive industry players also have ways to mitigate,” Agus added. Moreover, he added, the current situation is not only happening in Indonesia. “Because once again, this is not only Indonesia facing this, but all countries in the world,” he said. “Therefore, I am confident that the automotive industry already has plans, already has planning to mitigate fuel price increases including diesel,” Agus stated. The current situation, he said, is a normal market mechanism. “And if there is a shift from the market, that is also something that may be normal,” he said. “For example, now the market is more directed towards electric vehicles, due to energy security issues, rising fuel price issues. That is something normal in this market mechanism,” Agus said. He conveyed the same thing when asked about the latest regulations regarding electric vehicle fiscal incentives. For information, the government through the Ministry of Home Affairs has just issued a new regulation that will impose taxes on electric vehicles in Indonesia. Namely, Minister of Home Affairs Regulation Number 11 of 2026 concerning the Basis for Imposition of Motor Vehicle Tax, BBNKB, and Heavy Equipment Tax (Permendagri No 11/2026). This Permendagri No 11/2026 has been signed by Home Affairs Minister Tito Karnavian and takes effect upon promulgation, namely 1 April 2026. In this new regulation, electric vehicles are not mentioned as objects exempted from PKB and BBNKB. Thus, battery-based cars or motorcycles or electric vehicles can be subject to Motor Vehicle Tax (PKB) and Motor Vehicle Transfer Tax (BBNKB). Agus did not deny that Permendagri No 11/2026 will impact domestic car sales. “All things that involve cost increases will certainly affect sales, certainly will,” Agus said. As a note, the Indonesian Automotive Industry Association (Gaikindo) recorded that national car sales in March 2026 reached 61,271 units. This figure dropped significantly compared to February which reached 81,250 units. On a monthly basis (month-to-month), sales fell by around 19,979 units or about 24.58%. This sharp correction erased the surge that occurred in February, when the market grew more than 20% compared to January 2026. Compared to the same period last year, March 2026 sales were also lower. In March 2025, total sales were still around 71,099 units, meaning a decline of 9,828 units or about 13.82% year-on-year.