US Dollar breaches Rp17,800, implications forJune fuel prices? ESDM responds

The Ministry of Energy and Mineral Resources (ESDM) has addressed potential increases in domestic fuel prices following the rupiah’s weakness against the US dollar, which hit Rp17,800. Deputy Energy Minister Yuliot Tanjung stated the government has prepared measures to mitigate currency volatility’s impact on the energy sector, including increasing domestic oil production and strengthening refining capacity to reduce reliance on imports. ‘Regarding subsidised fuel price hikes, we have been pushing domestic production increases and have prepared domestic refineries,’ Tanjung said at ESDM on Friday (29 May 2026). The government has also issued Presidential regulation No. 26 of 2026 on domestic crude oil procurement, which prioritises locally produced crude for national needs amid tight global energy supplies. ‘ICP-based pricing ensures contractors are not disadvantaged, while imports can be handled by state-owned enterprises like Pertamina and Pertamina Patra Niaga, or through energy-related Public Service Agencies (BLU),’ he added. Energy Minister Bahlil Lahadalia earlier confirmed that subsidised fuel prices would not rise until the end of 2026. The government’s strategy aims to safeguard purchasing power amid global crude oil price volatility, which briefly touched $117 per barrel. Bahlil cited an average Indonesian crude price (ICP) of $80-81 so far this year, below the $100 threshold set by President Prabowo Subianto, ensuring no adjustments to consumer prices. ‘God willing, prices will remain stable until year-end,’ he added.