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Rising oil prices throw Indonesia’s energy subsidies into question
Russia’s war against Ukraine has caused world oil prices to surge to record levels. Days after the invasion, oil prices surged from US$92 to US$120 per barrel, the highest level since 2014. Nobody knows how long the conflict will last or how high prices will go. But if the war escalates, there will be significant ramifications on the global energy supply.
Author: Siwage Dharma Negara, ISEAS Yusof Ishak Institute
Countries must prepare themselves for a prolonged energy crisis. This includes Indonesia, a net oil importer. In 2021, the country experienced a trade deficit in the oil and gas sector amounting to US$13.3 billion.
National fuel consumption is around 1.4–1.5 million barrels per day, while its oil production capacity is less than 700,000 barrels per day.
Indonesian Finance Minister Sri Mulyani said the spike in crude oil prices has put pressure on the state budget. This is…
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