price

PT Pertamina (Persero), Indonesia’s state-owned energy company, officially increased the prices of several non-subsidized fuel products, effective Saturday, April 18, 2026. This move, aimed at aligning domestic prices with global market dynamics and alleviating the state budget’s fiscal burden, saw substantial adjustments across premium diesel variants. Pertamax Dex now retails at Rp 19,400 per liter, marking a significant increase of Rp 6,300 from its previous price of Rp 13,100. Similarly, Dexlite saw its price surge to Rp 23,600 per liter, an increment of Rp 9,400 from Rp 14,200 per liter. Pertamina Dex, the highest-grade diesel, also experienced a substantial hike, reaching Rp 23,900 per liter, up Rp 9,400 from its earlier price of Rp 14,500 per liter.

This series of adjustments underscores the government’s ongoing efforts to manage the intricate balance between energy affordability for its citizens and the financial sustainability of its national budget. The decision, though impacting a specific segment of consumers, reflects a broader economic strategy in response to fluctuating global energy markets and domestic fiscal imperatives.

Chronology and Background Context of Indonesia’s Fuel Policy

Indonesia operates a dual-tier fuel pricing system, distinguishing between subsidized and non-subsidized fuels. Subsidized fuels, primarily Pertalite (a lower-octane gasoline) and Solar (diesel), are offered at fixed, government-mandated prices significantly below their economic cost. This policy is designed to protect lower-income households and maintain economic stability by curbing inflation. The gap between the economic price and the subsidized price is covered by the state budget through subsidies and compensation payments to Pertamina.

Non-subsidized fuels, on the other hand, are subject to market forces. Their prices are typically adjusted based on global crude oil prices, the Rupiah’s exchange rate against the US Dollar, and Pertamina’s operational costs. These products, including Pertamax Dex, Dexlite, and Pertamina Dex, cater predominantly to industrial users, commercial transportation, and private vehicle owners seeking higher performance and cleaner emissions, who are generally perceived to have stronger purchasing power.

The decision to increase non-subsidized fuel prices on April 18, 2026, was not an isolated event but rather a response to a confluence of factors that had likely been building over previous months. Global crude oil prices had shown an upward trend, influenced by geopolitical tensions, OPEC+ production cuts, and a recovering global demand outlook. Simultaneously, the Indonesian Rupiah might have experienced some depreciation against the US Dollar, further increasing the cost of imported crude and refined products. For Pertamina, maintaining non-subsidized fuel prices below their economic value would translate into significant financial losses or require substantial compensation from the government, adding strain to the already stretched State Budget (APBN).

Historically, Indonesia has grappled with the challenge of fuel subsidies. Periods of high global oil prices have often led to massive subsidy expenditures, diverting funds from critical development sectors. Consequently, governments have periodically adjusted fuel prices, often facing public debate and protests. However, adjustments to non-subsidized fuels are generally met with less widespread public outcry compared to hikes in subsidized fuel prices, given their target demographic.

Detailed Price Adjustments and Their Magnitude

The recent price increases for non-subsidized diesel variants are notable for their substantial magnitude, reflecting the accumulated pressure from rising input costs.

• Pertamax Dex: Previously Rp 13,100 per liter, it jumped by Rp 6,300 to Rp 19,400 per liter. This represents an increase of approximately 48.1%. Pertamax Dex is a high-quality diesel fuel designed for modern diesel engines.
• Dexlite: Surging from Rp 14,200 per liter to Rp 23,600 per liter, this product saw the largest absolute increase of Rp 9,400 per liter, translating to an approximate 66.2% hike. Dexlite is a mid-range diesel fuel offering better performance than basic diesel.
• Pertamina Dex: As the premium diesel variant, its price rose from Rp 14,500 per liter to Rp 23,900 per liter, also an increase of Rp 9,400 per liter, or roughly 64.8%. Pertamina Dex is targeted at vehicles requiring superior diesel quality for optimal engine performance and efficiency.

These significant percentage increases underscore the degree to which previous prices had deviated from their actual economic cost, necessitating a sharp correction to reflect current market realities.

Official Responses and Pertamina’s Justification

While the original article focuses on expert opinion, it is logical to infer the official stance from both Pertamina and the government regarding such a significant policy decision.

Pertamina, as the implementer, would likely issue statements emphasizing its commitment to ensuring national energy security while maintaining the financial health of the company. A typical justification would highlight:

• Alignment with Market Prices: Stating that the price adjustments are a necessary measure to reflect the fluctuating global crude oil prices and the prevailing market value of refined products.
• Financial Sustainability: Explaining that selling non-subsidized fuels below their economic cost would jeopardize Pertamina’s financial stability, impacting its ability to invest in infrastructure, maintain supply, and develop new energy sources.
• Reducing Fiscal Burden: Acknowledging the government’s directive to reduce the state budget’s compensation burden, which arises when Pertamina sells non-subsidized fuels at prices lower than their market value.

The government, through its relevant ministries (e.g., Ministry of Energy and Mineral Resources, Ministry of Finance), would likely frame the decision as a prudent fiscal measure. Statements would emphasize:

• Targeted Adjustments: Highlighting that the price increases are specifically for non-subsidized fuels, which are consumed by a segment of society with higher purchasing power, thereby minimizing the impact on the broader populace.
• Protection of Vulnerable Groups: Reaffirming its commitment to maintaining the prices of subsidized fuels (Pertalite and Solar) to protect lower-income communities and manage inflation for essential goods.
• Fiscal Discipline: Explaining that managing the APBN effectively, including reducing energy subsidies/compensation, is crucial for long-term economic stability and for allocating resources to other priority sectors like education, healthcare, and infrastructure.

Expert Analysis and Broader Implications

Fahmy Radhi, an energy economics observer from Gadjah Mada University (UGM), characterized the decision to adjust non-subsidized fuel prices as a "timely policy" aimed at reducing the state budget’s burden from compensation payments. He noted that non-subsidized fuels are not designed for price retention, as this would invariably escalate fiscal pressures. "Although somewhat belated, the government has finally increased non-subsidized BBM prices, effective April 18, 2026," Fahmy stated to Republika on Sunday, April 19, 2026.

Fahmy acknowledged the substantial nature of the price hikes but projected that their impact on overall inflation and purchasing power would not be significant. His reasoning centers on the consumer demographic for these fuels: "The number of non-subsidized BBM consumers is not very large and they are categorized as upper-class with strong purchasing power." This implies that the cost increase, while noticeable for individual consumers, is unlikely to trigger widespread inflationary spirals or severely erode the average Indonesian’s ability to spend.

Furthermore, Fahmy lauded the government’s strategic decision to raise non-subsidized diesel prices without simultaneously increasing the prices of Pertamax and Green Pertamax (higher-octane gasoline variants). "The increase in non-subsidized BBM prices without raising the prices of Pertamax and Green Pertamax is also highly strategic," he remarked. He elaborated that the consumer base for Pertamax and Green Pertamax is considerably larger than that for the premium diesel products. A price hike for these gasoline variants, he warned, would likely contribute significantly to inflation and diminish public purchasing power.

More critically, Fahmy pointed out a potential "migration trap": "If Pertamax and Green Pertamax prices were increased while Pertalite prices remained unchanged, it would encourage a massive migration from Pertamax to Pertalite, which would bloat fuel subsidies even further." This highlights the delicate balancing act required in fuel pricing policy – maintaining a reasonable price gap between different fuel grades to prevent unintended shifts in consumption patterns that could undermine fiscal stability.

The Subsidy Guarantee and Its Caveats

A crucial element of the government’s strategy is its assurance that the prices of subsidized fuels, Pertalite and Solar, will remain unchanged until the end of 2026. Fahmy views this guarantee as beneficial for providing long-term certainty to consumers, effectively preventing "panic buying" and ensuring a stable supply of essential fuels. This stability for subsidized fuels is vital for maintaining social order and protecting the economic activities of small businesses, public transportation, and agricultural sectors that heavily rely on these fuels.

However, Fahmy also introduced a significant caveat regarding the government’s approach to this guarantee. He argued that using a specific "time frame" (until the end of 2026) as a benchmark for price stability carries inherent risks. "Using a time frame is highly risky and could disappoint consumers if that benchmark cannot be met, turning the guarantee into false hope," he cautioned. This risk is amplified by the unpredictable nature of global events, particularly the ongoing escalation of conflicts in the Middle East, which can significantly impact global oil prices without warning. The expert implied that geopolitical factors are inherently "unpredictable" and can derail even the best-laid plans for fixed-period price stability.

Instead, Fahmy proposed a more robust and transparent mechanism for managing expectations: "The guarantee would be more effective if the government used world oil prices as a benchmark, rather than a time indicator, for deciding on subsidized BBM price increases, so that the public is not disappointed by false hope." Basing decisions on dynamic market indicators, rather than arbitrary deadlines, would allow for greater flexibility and better communication with the public, explaining price adjustments as responses to verifiable external factors rather than policy shifts.

Broader Economic Impact and Future Outlook

While the direct inflationary impact of non-subsidized fuel price hikes may be contained, there could be ripple effects. Businesses relying on premium diesel, such as certain logistics companies, mining operations, or industrial sectors using heavy machinery, will face increased operational costs. These costs could eventually be passed on to consumers in the form of higher prices for goods and services, albeit likely in a more diffused and less immediate manner than a subsidized fuel hike.

The government’s commitment to maintaining subsidized fuel prices through 2026 demonstrates its strong focus on social protection and economic stability for the majority. However, this commitment comes with a significant fiscal responsibility. Should global oil prices surge unexpectedly and remain high, the subsidy and compensation burden on the APBN could become unsustainable, potentially forcing the government to re-evaluate its stance or seek alternative funding mechanisms.

Looking ahead, Indonesia’s energy policy will continue to navigate complex global and domestic pressures. The need for fiscal prudence, coupled with the imperative to ensure energy affordability and security, will necessitate agile and transparent decision-making. The ongoing geopolitical instability, the global energy transition, and domestic economic growth targets will all play a critical role in shaping future fuel pricing strategies. The expert’s recommendation to tie future subsidized fuel price decisions to global oil price benchmarks, rather than fixed timelines, offers a pathway towards greater transparency and potentially more sustainable fiscal management in the face of an ever-volatile global energy landscape.