Iran-Israel Conflict; Indonesia to Review Fuel Subsidy Budget

TEMPO.CO, Jakarta - Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto highlighted the impact of Iran's attack on Israel on the global oil market. He said the government would closely monitor the situation over the next couple of months before making any decisions regarding the fuel subsidy budget.

“We will observe the situation in the next month or two. If there is no escalation, we hope that oil prices will flatten but if the situation escalates, it will certainly be different,” Airlangga said at his office in Central Jakarta on Tuesday, April 16.

He explained that the ongoing tensions in the Middle East, particularly in Israel, have a significant impact on the economy. This is because the Strait of Hormuz, a vital shipping route for fuel, plays a crucial role in logistics. Therefore, the government will continue to closely monitor crude oil prices.

Currently, the average Indonesian crude oil price (ICP) is at US$83.78 per barrel, while the global oil price is at US$82 per barrel. Airlangga added that the government would keep a close eye on the price increase and coordinate with the governor of Bank Indonesia and the finance minister.

“As of now, there is no policy in place since we cannot overreact. We see that Israel and Iran have not made a decision yet,” the Golkar Party chairman said.

Airlangga also reiterated that there would be no hike in fuel prices until June 2024, as decided at a plenary cabinet meeting in mid-February.

RIANI SANUSI PUTRI

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