Steady Hands in Shifting Sands: Why Jakarta Is Freezing Fuel Costs Amid a Global Oil Storm

JAKARTA, Investortrust.id — With global crude benchmarks flirting with triple digits and geopolitical tensions simmering in the Middle East, Indonesia is reaching for an old but effective tool in its economic arsenal: the price freeze.

Minister of Energy and Mineral Resources Bahlil Lahadalia, speaking via video link from Seoul, South Korea, on Tuesday (March 31, 2026), delivered a message of calm to a jittery domestic market. "Our fuel reserves are all above the national minimum standard," Bahlil said. "Whether it is diesel, gasoline, gas, or aviation fuel, our supply is secure."

The decision to hold prices steady on April 1—a date typically reserved for monthly adjustments in non-subsidized fuel—underscores the administration’s sensitivity to inflation. For a nation where fuel costs dictate the price of everything from a bowl of bakso (meatball soup) to trans-archipelagic logistics, the move is a calculated bid to protect the "little people" and maintain the momentum of Southeast Asia’s largest economy.

The Balikpapan Buffer

The logic behind Jakarta’s confidence isn't just political; it’s industrial. The government is leaning heavily on the newly inaugurated Refinery Development Master Plan (RDMP) in Balikpapan, which went online in January 2026. The facility is expected to churn out roughly 4.5 million kiloliters (approx. 28.3 million barrels) of diesel annually.

Combined with the nation’s aggressive B-50 program—a mandate to blend diesel with 50% palm oil-based biofuel—Bahlil predicts a diesel surplus by year’s end. This shift is part of a broader "energy sovereignty" strategy designed to insulate the archipelago from the volatility of the Strait of Hormuz. Currently, Indonesia relies on the Middle East for only about 20% of its crude imports, having diversified its sourcing to North America and Southeast Asian neighbors.

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Rumors and Rationing

However, the price freeze has not come without friction. On Tuesday afternoon, Indonesian social media was set ablaze by a leaked document purportedly from the Downstream Oil and Gas Regulatory Agency (BPH Migas). The document suggested a hard cap on fuel purchases, limiting private cars to 50 liters (approx. 13.2 gallons) per day.

Government officials were quick to douse the flames. Yudhiawan Wibisono, Inspector General at the Ministry of Energy, urged the public to remain patient during a press conference at the BPH Migas headquarters. "There is no official decision from the government yet," he said. "Until a decree is signed, these reports remain unverified."

Despite the denial, the administration is subtly shifting the narrative toward conservation. Minister Bahlil suggested that while the government won't force a cap yet, a "reasonable and wise" use of fuel is necessary. He noted that a standard car should ideally not exceed 50 liters a day, though he clarified this would not apply to the heavy trucks and buses that form the backbone of the nation’s supply chain.

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The Cost of Stability

To the international observer, Jakarta’s defiance of market gravity may seem unsustainable. Brent crude trading between $100 and $115 per barrel typically necessitates a 5% to 10% price hike for non-subsidized fuels like Pertamax (92 RON), currently priced at Rp 12,300 ($0.77) per liter.

"A price adjustment in this geopolitical climate is actually logical and hard to avoid," said Anggawira, Secretary General of the Indonesian Young Entrepreneurs Association (Hipmi), on Tuesday. He noted that for the logistics and shipping sectors, fuel can account for up to 40% of total operating costs.

Yet, for the administration of President Prabowo Subianto, the social cost of a price hike far outweighs the fiscal burden. By keeping Pertalite (subsidized 90 RON gasoline) at Rp 10,000 ($0.63) per liter, the government is betting that price certainty will act as a hedge against social unrest and broader economic stagnation.

As the midnight deadline for April 1 approached, the message from the State Secretariat was clear: The pumps will stay open, and the prices will stay put. For now, Indonesia has chosen the price of peace over the volatility of the market.

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