Indonesia raises non-subsidized fuel pricesraises non-subsidized fuel prices amid global oil surge
Indonesia's state energy firm Pertamina raised prices for non-subsidized fuels like RON-98 petrol by nearly 50% and LPG canisters by 19% in regions including Jakarta, East Java and Central Java as of April 2026. Economists warn this could drive more households to subsidized fuels, risking shortages and straining the state budget already pressured by high global crude costs linked to the Iran war. The government is holding subsidized gasoline and diesel prices steady to shield lower-income users and curb inflation, while imposing purchase limits and budget cuts elsewhere. These steps highlight Indonesia's challenge in balancing fiscal limits with protecting citizens from energy shocks that could fuel economic unrest.
Economists
Rising non-subsidized fuel prices may push wealthier consumers toward subsidized options meant for the poor. This shift risks supply shortages for essential fuels and adds billions to subsidy costs amid soaring global oil prices. Authorities must monitor usage to avoid broader inflation.
Government
Subsidized fuel prices for gasoline and diesel remain fixed through 2026 as long as global oil stays below $97 per barrel. Measures like vehicle purchase caps at 50 liters monthly and budget reallocations cover the added costs without price hikes. These actions protect purchasing power and economic stability.
- Indonesia, the world's fourth-most populous nation, relies on fuel subsidies consuming over 15% of its annual budget.
- Pertamina nationalized Shell's assets in 1957, marking Indonesia's push for energy independence.
- Java, site of the price hikes, holds 56% of Indonesia's population on 7% of its land.
US-Iran Ceasefire War
The United States launched military strikes against Iran on June 26, 2026, in response to a drone attack on a commercial cargo ship in the Strait of Hormuz, calling it a "foolish violation" of the 60-day ceasefire agreement signed just days earlier[2][4][14].
26 June, 09:35 PM
US launches strikes against Iran following commercial ship attack26 June, 04:47 PM
Trump calls Iran drone attack on cargo ship a ceasefire violation
