Indonesia's Pertamax price surge strains middle‑class purchasing power and sparks subsidy reform debate

On June 10 2026 PT Pertamina Patra Niaga raised the prices of non‑subsidized fuels Pertamax (RON 92) from Rp 12,300 to Rp 16,250 per litre and Pertamax Green (RON 95) from Rp 12,900 to Rp 17,000. The government said the hike reflects rising world oil prices and that subsidized fuels such as Pertalite and Solar will stay unchanged.

Economists warn the increase will erode the purchasing power of Indonesia’s middle class, the main users of Pertamax, and could dampen domestic consumption that drives more than half of the country’s GDP. Inflation effects are expected to be limited because Pertamax is not a primary fuel for public transport or logistics.

Analysts project a roughly 10 % drop in Pertamax sales as drivers switch to cheaper Pertalite, adding about Rp 395,000 to a car owner’s monthly budget and Rp 119,000 for a motor‑bike rider. The World Bank noted that the richest 20 % of households receive over half of fuel‑subsidy benefits and recommended a three‑step reform: gradual price adjustments, targeted cash transfers to the poorest 40 %, and transparent reallocation of subsidy savings to social programmes and infrastructure.