Govt keeps subsidized fuel prices unchanged

Jakarta (ANTARA) - The Indonesian government will keep subsidized fuel prices unchanged despite rising global crude oil prices, prioritizing people's purchasing power while acknowledging the growing pressure on the state budget, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said.

The decision, made under President Prabowo Subianto's direction, maintains the retail price of Pertalite fixed at Rp10,000 (around US$0.56) per liter and subsidized Solar (diesel) at Rp6,800 (around US$0.39) per liter.

"As of today, the government has decided to maintain subsidized fuel prices without any increase," Bahlil said in Jakarta on Friday, acknowledging the significant burden the policy places on the state budget.

"President Prabowo believes that protecting and maintaining the purchasing power of low-to-middle-income citizens is far more important,” the minister added.

The decision comes as the Indonesian Crude Price (ICP) currently hovers between US$106 and US$108 per barrel, well above the US$70 per barrel assumption set in the 2026 State Budget.

Bahlil noted that the average ICP from January to September 2026 ranged from US$85 to US$90 per barrel.

To absorb the higher costs, he said that increasing the national subsidy allocation remains a viable option.

In the 2026 State Budget, the government allocated Rp210.1 trillion (around US$11.94 billion) for energy subsidies, while total energy subsidies and compensation package reached Rp381.3 trillion (around US$21.66 billion).

The Finance Ministry data showed that first-semester spending on subsidies and compensation reached Rp233 trillion (around US$13.24 billion), up 44.4 percent year-on-year.

The increase was driven by oil price swings and a 7.8 percent increase in fuel consumption volume.

Alongside price stability measures, the government is finalizing data validation to restrict subsidized Pertalite consumption for high-income households in the top two income deciles to ensure accurately targeted distribution.

Related news: Indonesia targets higher oil lifting of 612,500 bpd in 2027: Bahlil

Translator: Aria Ananda, Yashinta Difa
Editor: Bayu Prasetyo
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