Energy Ministry Reviews Impact of Rupiah Depreciation on Fuel Subsidies

TEMPO.CO, Jakarta - The Indonesian Ministry of Energy and Mineral Resources is discussing how the depreciation of the rupiah exchange rate affects oil imports and fuel subsidies. The Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Laode Sulaeman, stated that the government has not yet issued a new fiscal policy in response to pressure on the exchange rate.

"So the Minister of Energy and Mineral Resources (Bahlil Lahadalia) and the ministerial staff are currently discussing this matter. Let's wait and see how it develops," said Laode when met at the Ministry of Energy and Mineral Resources on Wednesday, May 13, 2026.

On the other hand, Laode confirmed that the national fuel reserves are in good condition and sufficient for 23 to 26 days. According to him, Indonesia has not faced an energy crisis like in some other countries.

He noted that this can be seen from the society's high level of activity, including traffic congestion on the roads. "I still get stuck in traffic every day, while in other countries, some people are already walking. This means that our energy reserves are still available," he said.

Currently, Indonesia still imports around 1 million barrels of oil per day, equivalent to about 20 million kiloliters of fuel per year. Imports are carried out because domestic oil production is only around 605,000 to 610,000 barrels per day, far below the national consumption amounting to 1.6 million barrels per day.

The large volume of imports has increased the energy subsidy burden in the 2026 state budget to Rp210 trillion, a 14.24 percent increase compared to the actual subsidy realization in 2024, which totaled Rp183.9 trillion.

Syafruddin Karimi, an economist at Andalas University, stated that the depreciation of the rupiah will lead to higher prices for imported goods and gradually trigger inflation.

At the close of trading yesterday, the rupiah weakened to Rp17,528 per US dollar, a decrease of 114 points compared to the previous day. According to Syafruddin, if the rupiah remains at Rp17,000 per US dollar for a long time, the pressure on the cost of living for the people will become more pronounced.

"Low-income and middle-class households will bear the heaviest burden because a large portion of their spending is concentrated on food, transportation, and routine needs," said Syafruddin.

This pressure is considered to be increasing due to the still high global energy prices. The price of Brent crude oil was recorded at US$96.48 per barrel, while the price of West Texas Intermediate (WTI) crude oil was recorded at US$98.72 per barrel. Increases in energy prices quickly spread to transportation and distribution costs, which then drive up the prices of goods in both traditional and modern retail markets.

Ilona Estherina contributed to the writing of this article

Read: Rupiah at 17,500: How Will Purbaya Assist Bank Indonesia?

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