Purbaya Confirms Fuel Prices to Stay Unchanged, Subsidy Burden Risks Loom Over State Budget

JAKARTA. The government has confirmed it will not raise subsidized fuel prices despite rising global oil prices. The policy is taken in consideration of the State Budget (APBN), which is still deemed capable of absorbing such volatility.

Minister of Finance Purbaya Yudhi Sadewa emphasized that there are currently no plans to adjust subsidized fuel prices. “As far as I know, there is no (policy adjustment on subsidized fuel). So I would say, don’t disturb the budget for now. It’s still too early,” he said at the Ministry of Finance office in Jakarta, as quoted today.

According to him, fiscal conditions remain strong enough to absorb the pressure from rising global energy prices. Indonesia Crude Price (ICP), currently around US$74 per barrel, is slightly above the APBN assumption but has not significantly affected the budget posture.

Purbaya explained that APBN calculations are not based on short-term price spikes but rather on average price movements throughout the year. Therefore, the government sees no urgency to take price adjustment measures in the near term.

“In taking action, timing is key. We are still about US$4 above the assumption of US$70. Why change things too quickly? Our actions show that we are being cautious. Everything has been calculated,” he said.

Nevertheless, the government remains alert to potential fiscal pressures if global oil prices continue to rise. Under certain scenarios, the energy subsidy burden could increase significantly if fuel prices are kept unchanged.

Purbaya stressed that the APBN still has the resilience to absorb such pressures, at least under current conditions. “Our APBN is still holding. I won’t change the budget or existing subsidies unless oil prices rise significantly. But for now, until year-end with current prices, the APBN can still hold. It depends on leadership decisions later, but I consider it safe,” he said.

However, he also signaled that subsidy policies have limits. If energy price pressures intensify sharply and persist over the long term, the government may consider policy adjustments, including sharing the burden with the public.

Overall, the government is prioritizing fuel price stability to protect people’s purchasing power, with the consequence of increasing energy subsidy burdens within the APBN. (KEN)