World Oil Prices Heat Up, HIPMI to Experts Say Increase in Non-Subsidized Fuel within Reasonable Limits

Gas station officers are filling up fuel. (ANTARA-M Agung Rajasa).

JAKARTA - The Secretary General of the Indonesian Young Entrepreneurs Association (Sekjen HIPMI), Anggawira, assessed that the increase in the price of non-subsidized fuel oil (BBM) was considered a reasonable step in the midst of global pressure due to the heating of geopolitical conflicts, especially in the Middle East region. This condition, he said, will indeed have a direct impact on the surge in world crude oil prices which are the main reference in determining the price of fuel oil in the country.

He said that the increase in the price of non-subsidized fuel could not be separated from the dynamics of the interconnected global energy market. According to him, Indonesia does not have full control over the fluctuations in world oil prices, which are currently under significant pressure.

"The increase in the price of non-subsidized fuel in a geopolitical situation like now is natural and difficult to avoid. The price of non-subsidized fuel is basically following the world crude oil price, the rupiah exchange rate, shipping costs, and risk premiums due to conflicts," said Anggawira when contacted, Tuesday, March 31.

He explained that the price of Brent oil, which has been moving in the range of 100 to 115 US dollars per barrel, even higher due to disruptions in the Strait of Hormuz, put great pressure on domestic fuel prices. This condition makes the room for price adjustments open if the trend persists.

Currently, the price of non-subsidized fuels such as Pertamax is in the range of Rp12,300 per liter, Dexlite Rp14,200 per liter, and Pertamina Dex Rp14,500 per liter. If the world oil price does not fall, then the price adjustment is considered a rational step to maintain the sustainability of energy supply.

Anggawira assessed that the increase in the price of non-subsidized fuel, which is still considered reasonable, is in the range of 5 to 10 percent. However, he reminded the government to continue to make adjustments gradually in order to minimize the impact on inflation and people's purchasing power.

"Realistically, the increase that is still considered reasonable for non-subsidized fuel is in the range of 5-10 percent. This means that Pertamax, which is currently around Rp. 12,300 per liter, can rise to the range of Rp. 12,900-13,500 per liter," he said.

From the business world, he continued, the increase in fuel prices will indeed have an impact on the increase in operating costs, especially in the transportation and logistics sectors. However, this condition also encourages business actors to carry out efficiency and innovation in energy use.

"For the trucking, logistics, shipping, bus, travel, and goods distribution sectors, fuel components can reach 30-40 percent of total operating costs," said Anggawira.

Meanwhile, public policy expert and lecturer at the Faculty of Social and Political Sciences, University of Parahiyangan (Unpar), Kristian Widya Wicaksono, assessed the increase in the price of non-subsidized fuel as a logical consequence of an integrated global energy system. According to him, this phenomenon reflects the transmission of prices from international to domestic markets.

"The increase in the price of non-subsidized fuel in the midst of the heating of the Middle East geopolitics is a difficult consequence to avoid in a globally interconnected energy system," said Kristian.

He explained that, in the perspective of public policy, the price increase was not merely an internal decision of the government, but a response to the increasing supply risks and global uncertainties. Therefore, the price adjustment policy needs to be viewed more broadly in the context of national energy stability.

Kristian added that the limit on price increases that can still be tolerated needs to consider the economic absorption of the community as well as the potential impact on inflation. Empirically, an increase in a certain range can still be managed without causing major turmoil.

On the other hand, he reminded that the public needed to be rational in dealing with this situation, including by saving energy consumption and adjusting household spending patterns. "The government is also expected to be able to respond with transparent, gradual policies, and strengthen social protection for vulnerable groups," he said.

Thus, he said, the increase in the price of non-subsidized fuel is not only seen as economic pressure, but also as an impetus to encourage energy efficiency and accelerate the transition to a more sustainable energy system in Indonesia.