JAKARTA - Chairman of Commission XI of the House of Representatives, Mukhamad Misbakhun, assessed that the Iranian-Israeli conflict fluctuation has not put significant pressure on Indonesian fiscals, especially in terms of subsidies for fuel oil (BBM).
According to him, as long as world oil prices have not passed the assumption that the price of Indonesian crude oil (ICP) set in the 2025 State Budget is 82 US dollars per barrel, the government's fiscal space is still maintained.
For information, the price of Brent crude was recorded at 67.31 US dollars per barrel at the close of 27 June 2025, while WTI crude was at the level of 65.07 US dollars per barrel.
"Currently the price has not touched 82 (US dollars per barrel). Still in the range of 75, some even rose 76, and some 79. What does that mean? From the oil price side, we are still very safe. We can still categorize fuel subsidies, our energy subsidies to be wary, but in real terms they are still under complete control in the APBN figures," said Misbakhun in an INDEF public discussion entitled "Iran-Israeli War Impact on the Indonesian Economy", Jakarta, quoted by Antara, Monday, June 30.
Misbakhun explained that analysis of the risk of rising oil prices due to geopolitical escalation has been prepared, including a scenario if the increase in oil prices reaches 100 US dollars per barrel. In that scenario, inflation is estimated to remain safe at the level of 2.70 percent.
"Our inflation (assuming) is 2.5 to 1 percent, it's a very safe range if there is a risk of oil passing through the price of 82 US dollars to 100 US dollars, and the government then raises subsidized oil prices in the range of 10 percent," he explained.
However, he did not deny that if oil prices continued to climb to above 100 dollars per barrel, the scenario for adjusting subsidized fuel prices would be included in government considerations. However, according to him, it must be carefully measured so as not to have a serious impact on public inflation and purchasing power.
On the other hand, Misbakhun assessed that Indonesia could actually take advantage of rising commodity prices due to the Iran-Israeli conflict. He called coal prices, crude palm oil (CPO), and metal minerals such as nickel tend to rise simultaneously following world oil prices. This will be an opportunity for Indonesia as a commodity exporter.
Indonesia is a net importer of oil, but we are also an exporter of commodities whose value soars when oil prices rise. This strengthens our tax revenues and non-tax revenues. So, the impact cannot be seen on the one hand alone, it needs to be simulated comprehensively," said Misbakhun.
However, he reminded that this condition must continue to be monitored because it is not necessarily directly proportional to fiscal resilience. Misbakhun then highlighted the low realization of the government budget until May 2025 which had only reached 28.1 percent, as well as the realization of the APBN which was only 33.1 percent.
He also encouraged the Ministry of Finance and related fiscal agencies to convey comprehensive calculations to the President, so that decisions related to subsidized fuel and APBN management can be taken accurately and anticipatoryly.
BACA JUGA:
As for the latest developments in the Iran-Israeli conflict, Iranian Foreign Minister (Menlu) Seyed Abbas Araghchi on Saturday 26 June morning local time said that if American President Donald Trump sincerely wants to reach an agreement with Tehran, he must stop his disrespect for Iran's supreme leader, Ali Khamenei.
Araghchi made the statement in a post on social media platform X while condemning several examples of disrespectful use of language by the US president while speaking of Iran's Supreme Leader Ali Khamenei.
"If President Trump really wants an agreement, he must stop being disrespectful to Iran's Supreme Leader and stop hurting millions of his followers (Kahmenei) sincerely," said Aragghchi, stating that goodwill would give birth to goodwill, and respect would give birth to respect.
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