US–Iran clash could prompt Indonesians to cancel Eid al-Fitr mudik

JAKARTA, KOMPAS.com – Geopolitical tensions in the Middle East are seen as potentially having wide-ranging impacts on various sectors, including Indonesia’s automotive industry. The conflict involving the United States, Israel, and Iran is feared to affect global energy stability, particularly the price of fuel. The impact is not limited to the energy sector, but could also influence consumer behaviour in vehicle purchases. When fuel prices are likely to rise, people tend to rethink their car purchases, especially those with conventional internal-combustion engines. “What is certain is that for those who are going to buy a petrol car, they should rethink or delay the purchase. The reconsideration is whether to buy a petrol car or an electric car. If they want a petrol car, they would choose to delay buying,” said Darmaningtyas when contacted by Kompas.com recently. According to him, the comparison between petrol-powered cars and electric vehicles will also be considered more often by consumers. However, electric vehicles are not yet fully an option for all circles. On the other hand, the conflict involving major powers has the potential to curb global energy price stability. This will ultimately affect domestic petrol prices and the costs of transportation for the public. “Along with rising fuel prices, the rupiah’s value is likely to plunge, because the government itself needs many US dollars, one of which is for importing fuel,” said Darmaningtyas. With increases in fuel prices, he continued, it will affect travel costs for the public, especially approaching the mudik period when mobility increases significantly. “Significant increases in fuel prices will affect the scale of transport costs, especially for homecomers using private vehicles, both motorcycles and cars,” said Darmaningtyas. He also sees downstream impacts from higher transport costs that could influence people’s decisions to undertake long journeys. The burden of costs could lead some to reconsider their mudik plans. “The magnitude of transport costs will be felt by private car users when combined with high tolls as well. When transport costs are high, people will rethink mudik, because the impact of higher fuel prices is broad, including higher prices for all goods,” said Darmaningtyas.