Business · Economy · 1 day ago
Rising Oil Prices Add Pressure to Indonesia’s Budget
Global oil prices have risen amid geopolitical uncertainty, with prices recently reaching more than $105 a barrel.
Indonesia’s Finance Minister Suahasil Nazara said the increase could affect the country’s budget, including both revenue and spending.
By the end of September 2026, the government had paid Rp 376.8 trillion in energy subsidies and compensation.
That was 54.1% more than in the same period a year earlier and 84.3% of the amount set aside in the budget.
Fuel and LPG use also increased compared with a year earlier.
At the same time, prices for several other commodities, including palm oil, nickel and coal, had weakened.
Suahasil said international organizations had lowered their forecasts for global economic growth in 2026, but gave no further details about what Indonesia might do next.
Global oil prices recently rose above US$105 per barrel, putting pressure on Indonesia’s state budget, Finance Minister Suahasil Nazara said.
Suahasil said higher oil prices could affect both government revenue and spending.
By the end of September 2026, energy subsidy and compensation payments had reached Rp 376.8 trillion, up 54.1% from a year earlier.
Fuel consumption rose 9.1% year on year, while LPG consumption increased 2.2%.
- Who
- Finance Minister Suahasil Nazara discussed the effects on Indonesia’s budget.
- What
- Rising global oil prices are increasing pressure on the state budget, including energy subsidy and compensation spending.
- When
- Suahasil spoke on October 9, 2026; the reported subsidy figures cover the period through the end of September 2026.
- Where
- At the Finance Ministry in Jakarta, Indonesia.
- Why
- The oil price rise was linked to geopolitical dynamics, and Suahasil said it would affect budget revenue and spending.
This story does not have two clearly opposing sides.
These commodity prices, if we look at them, Brent is at US$102 per barrel on the upper left. But in recent days we have seen US$105, and this will certainly have implications for our state budget. Implications for revenue, implications for spending, and so on.
Last year only Rp 244.6 trillion had been paid; this year we have paid Rp 376.8 trillion.
International institutions have lowered their global growth projections. Global growth in 2026 is projected to be lower than growth in 2025.
Global oil prices rose above US$105 per barrel, Suahasil said.
Energy subsidy and compensation payments reached Rp 376.8 trillion.
Suahasil discussed oil prices, subsidies and budget effects at an event at the Finance Ministry in Jakarta.
- Oil price
- Above US$105 per barrel in recent days
- Energy subsidies and compensation
- Rp 376.8 trillion by the end of September 2026
- Share of budget allocation
- 84.3%
- Year-on-year increase in payments
- 54.1%
- Fuel consumption
- 13,408.6 thousand kilolitres, up 9.1% year on year
- LPG consumption
- 5,761 million kg, up 2.2% year on year
Sources
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