Indonesia Believes in Cheap Fuel

Indonesia has maintained stable domestic fuel prices despite global oil shocks, prioritising energy security and protecting household purchasing power through subsidies. This approach reflects a longstanding social contract, where price stability outweighs efficiency concerns. While subsidies are often criticised for fiscal and environmental costs, Indonesia has applied gradual adjustments paired with social assistance to mitigate impacts. Historical experiences, particularly the 1998 crisis, reinforce caution against abrupt reforms. Rising subsidy spending highlights fiscal pressures, yet reforms remain politically sensitive. Moving forward, Indonesia may shift toward targeted, data-driven subsidies, balancing economic efficiency with social stability in an increasingly uncertain global energy environment.

Learn More About It Here