Indonesia Raises Fuel Prices by 32% Amid Cost-of-Living Pressures
Indonesia's state-owned Pertamina raised prices of premium gasoline (Pertamax) by approximately 32% on June 10, 2026, marking the first increase since the Iran war began. The move comes as the government grapples with surging subsidy costs and inflation concerns, with the finance minister claiming limited inflationary impact since these fuels are not used for public transportation. The price hike adds pressure on middle-class consumers already facing rising costs of basic goods and higher interest rates.
Pertamina increased the price of 92-octane Pertamax gasoline to 16,250 rupiah per liter from 12,300 rupiah, and 95-octane Pertamax Green to 17,000 rupiah from 12,900 rupiah. The increases follow Bank Indonesia's second interest rate hike in a month and budget data showing subsidy costs for fuel, power, and fertilizers jumped 208% year-over-year in May. Finance Minister Purbaya Yudhi Sadewa argued the inflationary impact would be limited because these premium fuels account for only 7% of domestic fuel sales and are primarily used by private vehicles rather than public transportation. However, the move has drawn concern from workers and economists, with DBS Bank's Radhika Rao noting that fiscal policy also needs defensive measures to support the economy. The subsidized 90-octane Pertalite fuel remained unchanged. Indonesia's headline inflation had already accelerated to an eight-month high of 3.08% in May.
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Indonesia raises price of widely used fuel by 32%, adds to cost-of-living concerns
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