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JAKARTA - Purbaya Yudhi Sadewa, Indonesia&rsquo;s finance minister, has reaffirmed that subsidised fuel prices will remain stable until the end of the year, despite rising global oil prices driven by escalating conflict involving the United States and Israel against Iran.
However, he said he could not predict or guarantee prices for non-subsidised fuel, as these are not subject to government price support.
&ldquo;We are prepared to maintain subsidised fuel prices through to the end of the year, assuming an average oil price of USD 100 per barrel,&rdquo; Purbaya said during a working meeting with Commission XI of the House of Representatives (DPR RI) in Jakarta on Monday (6/4).
He added that the government has prepared mitigation measures and assessed the resilience of the state budget (APBN) under scenarios where oil prices rise to USD 80 or USD 100 per barrel.
&ldquo;Subsidised fuel is secure until the end of the year. The public need not worry, the subsidy budget remains sufficient,&rdquo; he said.
In addition to the APBN, the government has other funding sources to address oil price pressures, including surplus budget funds (SAL) amounting to IDR 420 trillion, of which IDR 200 trillion is held in the banking system, as well as various revenue streams such as non-tax state revenue (PNBP) from the energy and mineral resources sector.
Purbaya stressed that &ldquo;the key point is that the funds are available &mdash; our fiscal cushion remains intact. The energy minister has also pledged additional revenue from rising global oil and coal prices.&rdquo;
The government is also cutting spending in less efficient ministries and agencies. This is crucial, as every USD 1 per barrel increase in oil prices adds IDR 6.8 trillion to the subsidy burden.
&ldquo;These efficiency measures will also help maintain the fiscal deficit at 2.92% without having to draw on SAL. We will control expenditure and boost revenues from several sectors, including commodities,&rdquo; Purbaya said. (DK/ZH)

USD 1 rise in oil prices adds IDR 6.8 trillion in subsidies. Purbaya says budget remains ample.