JAKARTA, August 28, 2025
Indonesia Sets Lower crude Oil Price for 2026 Budget
Indonesia’s goverment has agreed to assume a crude oil price of $70 per barrel for its 2026 state budget, a dip from the previous year’s $82 assumption.
- Indonesian Crude Price (ICP) for 2026 state budget set at $70 per barrel.
- Oil and gas production target is 1.594 million barrels of oil equivalent per day.
- Subsidized fuel volume for 2026 includes 19.162 million kiloliters of kerosene and diesel.
- 3-kilogram LPG subsidy volume is 8.31 million metric tons.
- Energy Minister Bahlil Lahadalia expressed optimism despite operational challenges.
The Ministry of Energy and Mineral Resources (ESDM) and the Indonesian House of Representatives’ Commission XII have finalized key macroeconomic assumptions for the energy sector in the Draft State Budget for 2026. A meaningful point of consensus is the determination of the Indonesian Crude Price (ICP) at $70 per barrel. This figure marks a decrease from the $82 per barrel assumption used in the 2025 State Budget.
What is the agreed-upon Indonesian Crude price for the 2026 budget? The Indonesian Crude Price (ICP) for the 2026 budget has been set at $70 per barrel.
The target for oil and gas production,or “lifting,” has been established at 1.594 million barrels of oil equivalent per day (BOEPD). This total comprises 610,000 barrels of oil per day (BOPD) and 984,000 BOEPD of natural gas.
Minister of Energy and Mineral Resources, Bahlil Lahadalia, conveyed optimism about meeting these targets.”God willing, it will be achieved,” he stated during a working meeting with Commission XII of the House of Representatives. He acknowledged current field challenges, including pipeline disturbances and a fire incident in Sumatra, but emphasized acceleration efforts. The remarks were broadcast live on Parliament TV on wednesday,August 27,2025.
Further agreements were reached regarding subsidized fuel volumes for 2026, totaling 19.162 million kiloliters (KL). This includes 0.526 million KL of kerosene and 18.636 million KL of diesel oil.
Additionally, the subsidy volume for 3-kilogram LPG has been set at 8.31 million metric tons. The subsidy for diesel oil will remain at Rp1,000 per liter. The electricity subsidy is projected to reach Rp101.72 trillion, with cost recovery estimated at $8.5 billion.
The Ministry of ESDM aims for careful and wise distribution of fuel subsidies to ensure efficiency and reach the intended recipients.
Minister Lahadalia stressed his commitment to meticulously managing fuel subsidies. He highlighted the importance of careful distribution, notably for LPG, to ensure it is “on target” and handled “wisely.”
Earlier in July, Lahadalia had proposed an ICP range of $60-$80 per barrel for the 2026 State Budget. This proposal was informed by ICP realizations from January to May, which averaged $70.5 per barrel, with May’s average at $62.75 and a June surge to $69.33 per barrel.
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