Fuel Prices May Rise, Government Monitors Escalation of Middle East Conflict

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto said that fuel prices (BBM) could potentially increase as global geopolitical tensions increase.

Airlangga said that the escalation of the conflict after the United States attack on Iran pushed up world oil prices and had the potential to disrupt global oil supplies and energy distribution routes in strategic areas such as the Strait of Hormuz and the Red Sea (Red Sea) to become crucial points affected by tensions.

According to Airlangga, the potential increase in prices is similar to the conditions that occurred during the Russian-Ukrainian war, where global energy prices also jumped.

"It will automatically go up just like when the Ukraine war went up," he told the media, Monday, March 2.

However, Airlangga added that the price spike is not expected to be as high as before because there is additional supply from the United States.

In addition, he said that OPEC member countries are also said to be increasing their production capacity to maintain the stability of the world's oil supply.

As a precautionary measure, he added that the government had prepared a number of strategies to maintain national energy resilience, one of which was through cooperation in oil supplies from outside the Middle East region.

Airlangga said PT Pertamina (Persero) had signed a memorandum of understanding (MoU) with a number of energy companies from the United States, such as Chevron and Exxon, as well as other partners.

Regarding the possibility of importing oil from Russia, Airlangga said the government would continue to monitor the available supply sources and make it possible to be imported according to national needs.

"(Take oil from Russia?) Yes, of course we monitor which is available and which can be imported," he explained.

Regarding the government's next steps, Airlangga emphasized that the government would continue to monitor the development of the situation before taking further policies.

"Later we will monitor it first," he explained.

For information, quoting data from Trading Economics until 13.15 WIB, the price of Brent crude oil broke through 78.9 US dollars per barrel. Meanwhile, the price of West Texas intermediate crude oil (WTI) rose to around 71.67 US dollars per barrel.