An Indonesian legislator has called on the government to evaluate domestic fuel prices in light of surging global oil costs, which are reportedly jeopardizing the national budget. The call emphasizes the need for concurrent measures to protect consumers from potential impacts.
Lamhot Sinaga, Deputy Chair of the House of Representatives’ Commission VII, stated on Saturday that international oil prices have escalated to approximately US$140 per barrel. This figure significantly exceeds the US$70 per barrel crude oil assumption outlined in the 2026 state budget. While acknowledging the government’s current decision to maintain stable fuel prices, Mr. Sinaga urged greater flexibility in addressing external economic pressures.
He described the situation as exceptional, necessitating a prompt and well-considered government response. He highlighted that every US$1 rise in global oil prices could translate into an additional fiscal burden of approximately Rp6 trillion (about US$352 million). The lawmaker attributed the price surge partly to escalating security tensions disrupting oil transit through the Strait of Hormuz, a critical global shipping lane, amidst ongoing conflicts involving the US, Israel, and Iran.
Considering these risks, he suggested that adjusting fuel prices domestically could be a pragmatic step to alleviate budgetary strain. He cautioned that inaction could further expand the fiscal deficit as costs for subsidies and compensation continue their upward trend. This perspective aligns with previous statements from Energy and Mineral Resources Minister Bahlil Lahadalia, who has advocated for responsive policies to navigate global market fluctuations.
Nonetheless, Mr. Sinaga underscored that any potential price revisions must be coupled with robust mitigation strategies designed to shield the public from increased expenses. He specifically emphasized the importance of safeguards to protect vulnerable segments of the population. He affirmed the House of Representatives’ commitment to scrutinizing policies that seek to balance fiscal sustainability with social welfare.
Mr. Sinaga also advocated for enhanced coordination among various stakeholders to craft energy policies that are adaptive to evolving global conditions. Maintaining national energy security amidst persistent global market uncertainties was also highlighted as crucial. Ultimately, the government’s future decisions must carefully balance fiscal strength with potential social ramifications, he concluded.
Source: Original
