PRABOWO URGES VIGILANCE, PRUDENT ENERGY USE AMID GLOBAL OIL SUPPLY RISKS

JAKARTA, March 20 (Bernama) -- Indonesian President Prabowo Subianto has urged vigilance and prudent energy use as the government anticipates broader risks to global oil supply that stem from geopolitical developments in West Asia.

He warned that prolonged escalation including security risks at the Strait of Hormuz would further disrupt oil supply and may push crude prices as high as US$200 per barrel.

Indonesians might need to reduce fuel consumption as a precaution, he said during a roundtable discussion with senior journalists from major local media organisations held at his residence in Hambalang, West Java, recently.

“This one year we really have to be vigilant. Whether we like it or not, we need to reduce fuel consumption,” he said.

Amid the external volatility, the President said Indonesia has outlined several contingency measures to help cushion domestic impacts, such as plan to increase production of coal, particularly for electricity generation while acknowledging its environmental drawbacks.

He said the government is also intensifying efficiency measures to safeguard state finances, in line with its commitment to maintaining fiscal discipline under the State Budget (APBN), including keeping the deficit within the statutory ceiling of around three per cent of gross domestic product (GDP).

He reaffirmed that essential spending, particularly on education and core government operations, would not be affected, with cuts instead targeting areas such as excessive ceremonial expenses, procurement and non-essential programmes.

He said cuts on unproductive and non-essential expenditure in government’s efficiency efforts had already yielded savings of about Rp308 trillion (US$18.15 billion).

Prabowo also noted that Indonesia’s Incremental Capital Output Ratio (ICOR) remains higher than regional peers, indicating relatively lower economic efficiency, with the country estimated to be about 30 per cent less efficient than several neighbouring economies.

The President also outlined a long-term plan to boost electrification, expand renewables and leverage resources such as coal and palm oil to support the energy transition and serve as a game changer in strengthening Indonesia’s resilience against global price volatility.

-- BERNAMA