Indonesia Plans Fiscal Measures to Guard Budget if Oil Prices Spike in 2027
Finance Minister Purbaya Yudhi Sadewa said the government will act to keep the budget sustainable if global oil prices rise sharply next year.
Indonesia's Finance Minister Purbaya Yudhi Sadewa told reporters that the government is prepared to take actions to ensure budget sustainability if global oil prices climb in 2027, especially given persistent geopolitical uncertainty. He emphasized that past fluctuations have equipped the administration to respond without surprise. The upcoming State Budget for 2027 is built on an assumed Indonesian Crude Price of $75 per barrel and a rupiah exchange rate of Rp17,500 per US dollar, both higher than the figures used for 2026.
Correspondingly, the budget earmarks Rp272.95 trillion for energy subsidies, up from Rp227.3 trillion the previous year. The Ministry of Energy and Mineral Resources explained that subsidy levels depend on oil price movements, the ICP, exchange rates, and allocated energy quotas. No specific policy tools were disclosed, but the minister assured that fiscal adjustments will be made as needed.
How this story developed
- Jul 20 U.S. and Iran intensify air strikes over Strait of Hormuz, diplomacy stalls
- Sep 3 Iran's army claimed radar systems and locations where American forces were stationed at the UAE's Al Minhad Air Base were attacked with missiles and drones.
- Sep 4 Iran has begun testing methanol as an oxygenate in its gasoline blend.
- Sep 4 The United Arab Emirates announced a full stop to commercial and financial dealings with Iran.
- Sep 4 Iran announced missile and drone attacks on U.S. bases in Kuwait and the United Arab Emirates.
- Sep 5 Republican committees have filed a petition with the Supreme Court challenging the Fourth Circuit ruling.
- Sep 5 U.S. forces hit launchers on Larak Island and Iran fired ballistic missiles at U.S. sites in Jordan and the United Arab Emirates.
- Sep 5 Vance publicly downplayed the reported civilian deaths from the alleged strike.
- Sep 5 Eyewitnesses said the explosions shattered the wedding celebration in Kuhestak.
- Sep 7 GasBuddy released a forecast predicting a $4.03 average gasoline price for the Labor Day weekend.
- Sep 7 Brent crude climbed to about $97 a barrel as US‑Iran clashes intensified, and analysts said gasoline prices may ease in October with the shift to winter‑grade fuel.
- Sep 9 The Islamic Revolutionary Guard Corps said it will soon publish coordinates for a new restricted sea zone stretching from Chabahar into the Gulf of Oman and Arabian Sea, affecting vessels that enter or later attempt the Strait of Hormuz.
- Sep 10 Iran announced the zone will begin around Chabahar and cover parts of the Gulf of Oman and Arabian Sea.
- Sep 11 Fed minutes revealed a 9‑3 vote to keep rates near 3.6% and a drop in market odds for a September hike to about 67%.
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