No Increase in Subsidized Fuel Prices Until the End of 2026: Finance Minister

Jakarta: Indonesia’s Finance Minister Purbaya Yudhi Sadewa said subsidized fuel prices will remain unchanged through the end of 2026 despite rising global oil prices driven by tensions involving the United States, Israel, and Iran.

He added that prices of non-subsidized fuel could still fluctuate in line with market dynamics, as they are not covered by government subsidies.

“We are prepared to keep subsidized fuel prices unchanged through the end of the year, assuming global oil prices average around USD100 per barrel,” he said during a meeting with Commission XI of the House of Representatives (DPR) in Jakarta on Monday.

Sadewa said the Finance Ministry has prepared mitigation measures and assessed the resilience of the state budget under various oil price scenarios, including USD80 and USD100 per barrel.

In addition to the state budget, he noted that the government has other funding sources to cushion the impact of higher oil prices.

These include the Excess Budget Balance (SAL), which stands at Rp420 trillion (around USD24.6 billion), including Rp200 trillion currently placed in the banking system.

He added that the government also has alternative revenue streams to support subsidy needs, including non-tax state revenue (PNBP) from the energy and mineral resources sector.

The minister said the government is working to improve budget efficiency across ministries and agencies by cutting non-essential spending.

This step is necessary as every USD1 increase in global oil prices could add around Rp6.8 trillion to subsidy costs.

He said the efficiency measures are aimed at maintaining the fiscal deficit at 2.92 percent without drawing on the SAL.