Indonesia to raise fuel prices by up to 40% as government cannot bear the burden

The vice chairman of the Indonesian parliament’s energy committee said Indonesia could raise fuel prices by 30-40% to ease budgetary pressures after using the state budget to subsidize fuel costs.

It was briefed on fuel price increases during a closed-door parliamentary session with Indonesian oil company Pertamina earlier this week.

According to the report, Indonesia tripled its energy subsidies to 502 trillion rupiahs in 2022, or about 16% of the total budget, amid rising global oil prices and a weakening rupiah.

The Indonesian government has said that more budgetary resources will be needed to subsidize fuel prices this year if it does not raise prices.

Pertamina wants to increase the price of 90-octane gasoline from 7,650 rupiah to 10,000 rupiah (67.5 cents) per liter, 92-octane gasoline from 12,500 rupiah to 16,000 rupiah per liter, and diesel from 5,150 rupiah to 7,200 rupiah per liter.

Pertamina has also suggested measures to limit fuel sales, such as banning the purchase of government-subsidized fuel for big-block vehicles.

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