Subsidized Fuel Prices in Indonesia Hold Steady Despite Rising Oil Prices

TEMPO.CO, Jakarta - The Minister of Energy and Mineral Resources, Bahlil Lahadalia, said Indonesia’s subsidized fuel prices have not changed despite rising global oil prices caused by the escalating conflict in the Middle East. Non-subsidized fuel, which follows market dynamics, also remains unchanged.

“No matter how high global prices go, domestic subsidized fuel prices will remain the same until the government decides otherwise,” Bahlil said at a press conference in Jakarta on Tuesday, March 3, 2026.

According to the 2026 State Budget, the Indonesian Crude Price (ICP) is set at US$70 per barrel, but current market prices have risen to US$78-80 per barrel.

Bahlil acknowledged that higher ICP could increase government spending on fuel subsidies but noted that the rise could also generate revenue from Indonesia’s production of about 600,000 barrels of oil per day.

“Subsidized fuel prices have not changed, so everything is under control. We hope that during the holidays and Ramadan, fuel prices will remain stable or even decrease,” he added.

Indonesia currently imports 25% of its crude oil from the Middle East, with the remainder coming from Africa, the United States, Brazil, and other regions. Due to the closure of the Strait of Hormuz amid the US–Israel–Iran conflict, the government is redirecting this Middle East import to the United States.

This redirection aligns with the Agreement on Reciprocal Trade (ART) with the US, under which Indonesia commits to purchasing US$15 billion worth of fuel and liquefied petroleum gas.

Read: Indonesia Says 1,000-Ton Rice Imports from U.S. Limited to Specialty Varieties

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