Every time the government or PT Pertamina (Persero) announces (it should be, but in recent years, it has been done secretly in the middle of the night along with thieves looting people's homes) an increase in the price of fuel (Bahan Bakar Minyak / BBM), the public response is almost invariably the same: waves of criticism on social media, long queues at petrol station forecourts, and demonstrations across the country. Yet this patterned, recurring response conceals a deeper question—is a fuel price increase merely a technical fiscal matter, or does it in fact reflect an ideological choice and the direction of a nation’s energy politics?
I. BACKGROUND TO THE PROBLEM
Pertamax, a petrol with a 92 octane rating, occupies a unique position within Indonesia’s energy policy architecture. Unlike Pertalite (RON 90) and Solar (diesel), which receive direct subsidies from the State Budget (Anggaran Pendapatan dan Belanja Negara / APBN), Pertamax is classified as a non-subsidised fuel. Its retail price is therefore linked directly to global market mechanisms: international crude oil prices, the rupiah-to-US-dollar exchange rate, and distribution and operational costs.
Periodically, Pertamina adjusts the price of Pertamax with reference to the Mean of Platts Singapore (MOPS) formula, plus an alpha or profit margin. When global oil prices fluctuate violently—as occurred in the aftermath of the COVID-19 pandemic, the global energy crisis of 2021–2022, and the Russia–Ukraine geopolitical tensions—the price of Pertamax rises correspondingly.
Although Pertamax is unsubsidised, the impact of its price increases cannot be dismissed out of hand. Millions of motor vehicles in Indonesia—particularly in urban areas—consume Pertamax daily. Pertamax users are predominantly urban middle-class motorists who own vehicles with fuel-injection engines, which require higher-octane petrol to maintain engine performance and efficiency.
On the fiscal front, the government faces a far from simple dilemma. Energy subsidies—particularly for Pertalite, Solar, and 3-kilogram LPG canisters—place an enormous burden on the state budget. In years when global oil prices are elevated, subsidy expenditure can reach hundreds of trillions of rupiah, threatening the balance of the APBN and the government’s capacity to fund other development programmes. In this context, increases in the price of non-subsidised fuels such as Pertamax are frequently positioned as part of a broader fiscal rationalisation strategy.
“When the price of Pertamax rises, it is not merely a number on a petrol station forecourt that changes. What changes is the social equilibrium, the economic burden on households, and public trust in the government.”
This essay seeks to dissect the complexities of the impact of Pertamax price increases through five analytical lenses: an ideological perspective that interrogates the role of the state versus the market; a political perspective that examines governmental legitimacy and stability; an economic perspective that analyses the impact on purchasing power and the state budget; a social perspective that unpacks inequality and public responses; and a cultural perspective that highlights the values, identities, and collective narratives embedded in energy consumption.
II. THE IDEOLOGICAL PERSPECTIVE
2.1. The State as Protector or the Market as Arbiter?
The most fundamental debate underlying fuel pricing policy is an authentically ideological question: to what extent should the state intervene in regulating energy prices? At one pole lies an interventionist view, which holds that energy is an essential public good and that the state is therefore obliged to ensure its accessibility to all citizens. At the other, the free-market perspective argues that state interference creates distortions, inefficiencies, and an unsustainable fiscal burden.
Indonesia, in its historical and constitutional context, has in fact already formulated an answer to this question. Article 33 of the 1945 Constitution explicitly states that the land, waters, and natural resources contained therein are controlled by the state and used for the greatest possible welfare of the people. The phrase “controlled by the state” does not mean outright ownership or monopoly, but rather that the state possesses the authority to regulate, supervise, and direct the exploitation of natural resources — including energy—in the public interest.
In practice, however, the implementation of this constitutional mandate frequently comes into conflict with the pressures of global economic liberalisation. Indonesia’s membership of various free trade agreements and its need to attract foreign investment have impelled the government to progressively reduce its intervention in price mechanisms. The fuel deregulation policies that commenced during the Reform Era (Reformasi) represent the clearest expression of this ideological shift.
2.2. Energy Justice: Who Is Protected?
From the perspective of energy justice, Indonesia’s two-tier fuel pricing policy—subsidised Pertalite and Solar on the one hand, non-subsidised Pertamax on the other—contains a genuine paradox. On the one side, Pertalite and Solar subsidies are nominally intended to protect lower-income households. On the other, a body of research indicates that the bulk of the benefits from fuel subsidies are in fact enjoyed by upper-middle-class households, which own considerably more motor vehicles.
Meanwhile, the middle class who consciously choose Pertamax—whether because their vehicles’ engine specifications require higher-octane petrol, or out of environmental and efficiency considerations—bear the full cost of global oil price volatility. They receive no subsidy protection, yet nor are they sufficiently affluent to absorb price increases without financial consequence.
This situation raises a deeper ideological question: is social justice in energy policy adequately measured by the availability of cheap fuel for particular groups, or must it encompass a more comprehensive principle concerning who bears the cost of the externalities of fossil fuel consumption?
III. THE POLITICAL PERSPECTIVE
3.1. Governmental Legitimacy Amid Rising Prices
Politically, a fuel price increase is amongst the most high-risk decisions any government can take. Indonesian history records that such increases have almost invariably triggered significant socio-political upheaval. Student and labour protests, falling public trust indices, and heightened opposition sentiment are consequences that can be expected to follow virtually every price announcement.
This occurs because fuel has become a form of “social contract” between the state and its citizens. The public, regardless of market logic and fiscal rationality, holds the expectation that the state—as steward of natural resources—ought to be capable of providing energy at affordable prices. When that expectation is violated, the reaction is not merely an economic grievance but a deeper political disillusionment.
Interestingly, different governments have adopted markedly different political communication strategies when confronting fuel price increases. The Soeharto era foregrounded a narrative of sacrifice for national development. The early Reform Era tended to be more defensive and reactive. The administration of Joko Widodo, particularly at the time of the September 2022 fuel price increases, attempted to frame the rises as “difficult but responsible choices”, whilst simultaneously announcing a social protection compensation package worth Rp 24.17 trillion.
3.2. Political Stability and Opportunities for the Opposition
Price increases for Pertamax have consistently been exploited by opposition groups as ammunition for criticism of the government. The narratives constructed typically revolve around two accusations: first, that the government has failed to manage the economy competently, such that fuel prices continue to rise; and second, that the government is more aligned with the interests of corporations and the global market than with those of the people.
In the age of digital democracy, this dynamic has grown considerably more complex. Social media accelerates the spread of negative sentiment and enables the rapid mobilisation of large numbers of people. Hashtags criticising fuel policy effortlessly become trending topics, generating genuine political pressure even if they do not always reflect the majority of public opinion.
“In modern democracy, public perception of policy is as important as the substance of the policy itself. A government that fails to manage the narrative will encounter political resistance far greater than the actual economic impact warrants.”
Political stability is also bound up with the government’s capacity to build supporting coalitions. When the price of Pertamax rises, transport business associations, logistics associations, and trade unions typically become the most vociferous critics. The government’s ability to manage the interests of these groups is a decisive factor in determining how far a price increase will destabilise the political landscape.
3.3. The Narrative of National Energy Policy
How the government frames Pertamax price increases within a broader national energy policy narrative is also a crucial political dimension. Successful governments are those able to connect short-term, painful policies to a convincing long-term vision—for instance, an energy transition, renewable energy development, or a more precisely targeted subsidy reform programme.
The challenge, however, is that energy transition narratives are frequently too abstract and long-term to dampen public disappointment that is immediate and concrete. When Pertamax prices rise today, promises about solar panels and electric vehicles in the future feel far too distant to offer much consolation.
IV. THE ECONOMIC PERSPECTIVE
4.1. The Impact on Inflation and Purchasing Power
From a macroeconomic standpoint, Pertamax price increases carry both direct and indirect consequences for the national rate of inflation. The direct impact is felt in the transport component of the Consumer Price Index (CPI), whilst the indirect impact is wider and more sustained—affecting the entire supply chain that depends on fuel as a production input.
Transport is the most sensitive sector. Freight vehicles, ride-hailing services, motorcycle taxis (ojek), and various other modes of commercial transport immediately revise their fares when fuel prices rise. These fare adjustments then ripple through to the prices of consumer goods, since virtually every product that reaches the consumer passes through a distribution process dependent upon fuel.
Bank Indonesia, as the monetary authority, must tread carefully in responding to fuel-price-driven inflation. On the one hand, rising inflation calls for a tighter monetary policy stance. On the other hand, excessive monetary tightening risks slowing economic growth. This is the classic dilemma confronted by central banks in developing nations when faced with supply-side inflation.
4.2. The Knock-On Effect: From Logistics to Small and Medium-Sized Enterprises
One of the most significant yet frequently overlooked impacts of Pertamax price increases is the knock-on effect on Micro, Small and Medium-sized Enterprises (MSMEs, or UMKMs in Indonesian). MSMEs are the backbone of the Indonesian economy, contributing more than 60 per cent of Gross Domestic Product (GDP) and absorbing more than 97 per cent of the workforce.
MSMEs in the food and beverage sector, for instance, face simultaneous increases in raw material costs and distribution expenses. Small traders (warung) that use refrigerated motorcycles to transport ice or fresh produce must bear higher operating costs. Catering businesses, grocery shops, and market traders face pressure from two directions: costs are rising whilst consumer purchasing power is being eroded.
The capacity of MSMEs to absorb these cost increases is far more limited than that of large corporations, which can achieve economies of scale, negotiate long-term contracts, or even hedge against commodity price fluctuations. As a consequence, fuel price increases frequently impose a disproportionately heavier burden on small business operators.
4.3. Implications for the State Budget
From a fiscal perspective, Pertamax price increases have an ambivalent relevance for the state budget. On the one side, state revenues from oil and gas taxation and non-tax state revenue (PNBP) will increase as prices rise. On the other, the inflationary pressures generated may compel the government to increase allocations for social protection and direct cash transfers.
Of greater strategic importance is how Pertamax price increases are positioned within the context of broader energy subsidy reform. If such increases are accompanied by a restructuring of subsidy schemes towards more precisely targeted delivery—for example, through direct cash transfers to vulnerable groups—the net fiscal impact could be substantially positive.
However, Indonesia continues to face significant challenges in respect of its subsidy recipient database. Subsidy programmes that are poorly targeted not only squander state resources but also create long-term moral hazard and economic inefficiency. Without comprehensive subsidy system reform, Pertamax price increases merely relocate the fiscal problem rather than resolve it.
V. THE SOCIAL PERSPECTIVE
5.1. An Added Burden on the Urban Middle Class
Indonesia’s urban middle class occupies a paradoxical position: too affluent to qualify for subsidies, yet not wealthy enough to absorb price increases without consequence. They are the principal users of Pertamax—both because their vehicles’ engine specifications require higher-octane fuel and because they were concerned for efficiency and environmental responsibility.
When Pertamax prices rise, the consequences for the middle class are cumulative. Daily transport costs increase, basic necessities become more expensive, and the room for saving or investment narrows further. In a context where Indonesia’s middle class remains highly vulnerable—many having only recently graduated from the “near-poor” category—this pressure can have a significant impact on their social mobility.
This phenomenon is also reflected in changing consumption behaviour. Research indicates that a proportion of Pertamax users switch to Pertalite when the price differential widens significantly, despite the attendant risks of reduced engine efficiency and increased vehicle emissions. Others begin to consider greater use of public transport or vehicle-sharing arrangements in order to reduce costs.
5.2. Inequality and Social Resentment
One of the most subtle yet potentially explosive social impacts of Pertamax price increases is the potential widening of social inequality and horizontal resentment. When Pertalite subsidies are maintained whilst Pertamax prices are raised, an increasingly clear demarcation emerges between the “subsidised group” and the “group paying market prices.”
At the community level, this distinction can deepen existing social fault lines. Moreover, debates about who is “entitled” to subsidies are frequently laden with assumptions about class, lifestyle, and social propriety that are not always accurate or fair.
“Inequality is not merely a matter of income differentials; it is also a question of who bears risk and uncertainty. In the fuel context, Pertamax users absorb the volatility of global oil prices, whilst Pertalite users are shielded by subsidies whose financing comes from taxes paid by all citizens—including Pertamax users themselves.”
5.3. Public Response and Adaptation
Indonesian society has demonstrated a considerable capacity for adaptation when confronted with fuel price increases. Responses range widely: from formal protests through demonstrations and petitions, to pragmatic adjustments in everyday behaviour.
Several commonly observed adaptation patterns include the following:
• Switching to lower-octane fuel, albeit with the risk of reduced engine efficiency
• Increased use of public transport or ride-hailing services for particular journeys
• Journey consolidation—combining several errands into a single trip
• Growing interest in electric vehicles as a long-term alternative
• The formation of carpooling communities and vehicle-sharing arrangements
Viewed positively, these adaptations may in the long run drive more sustainable behavioural change. However, access to these alternatives is not evenly distributed—not everyone lives in an area served by an adequate public transport network, and not everyone is in a position to switch to an electric vehicle.
VI. THE CULTURAL PERSPECTIVE
6.1. A Culture of Private Vehicle Ownership: The Structural Root of Dependency
To understand why the impact of Pertamax price increases is felt so keenly in Indonesia, it is necessary to examine the cultural roots of the country’s energy consumption patterns. Indonesia is one of the largest automotive markets in South-East Asia, with a motor vehicle fleet that continues to grow year on year. Ownership of a private vehicle—particularly a motorcycle—has become a kind of minimum standard of living in many urban areas.
This phenomenon is not solely the product of individual choice; it is the consequence of urban planning policies and infrastructure development that, over several decades, have consistently prioritised roads over public transport. Indonesian cities, particularly those outside the Jabodetabek agglomeration, were built on the assumption that their residents would use private vehicles. Without a vehicle, everyday mobility becomes severely restricted.
As a result, motor vehicle ownership is no longer merely a lifestyle choice but a functional necessity that cannot easily be negotiated away. In this context, fuel price increases do not merely affect one’s wallet; they strike at the very foundations of daily mobility and productivity.
6.2. Pertamax as a Status Symbol and Marker of Social Identity
Beyond its technical function, Pertamax also carries a symbolic dimension that cannot be overlooked. Within Indonesia’s fuel hierarchy, Pertamax — and even more so Pertamax Turbo or Pertamina Dex — is frequently perceived as a more “upmarket” or “prestigious” choice than Pertalite. Choosing Pertamax is regarded as a marker of financial capability, quality consciousness, or concern for the condition of one’s engine.
This perception is not merely an external projection; it has also been actively constructed through Pertamina’s marketing strategy, which promotes Pertamax as the fuel for high-quality vehicles. Pertamax advertisements habitually project images of luxury, smooth motoring, and well-maintained engines—reinforcing the association between fuel choice and social status.
When Pertamax prices rise, users who have chosen this fuel as part of their social identity face a cultural dilemma: to continue using Pertamax in order to maintain their social image, or to switch to Pertalite at the risk of being perceived as having “come down in the world.” This dynamic may sound trivial, yet it reflects how deeply social values can be embedded in everyday consumption decisions.
6.3. Media Narratives and the Framing of Popular Culture
The manner in which media and popular culture frame the issue of Pertamax price increases is also an important cultural dimension. Two dominant frames recur in Indonesian media coverage and public discourse.
The first is the “crisis” frame: price increases are portrayed as indicators of economic policy failure, public suffering, and governmental incompetence. This frame predominates in media outlets that adopt a critical stance towards the government and frequently gives rise to dramatic narratives about the impact of the rises.
The second is the “routine” frame: as price increases recur, segments of the public and media begin to treat them as ordinary events requiring no extraordinary reaction. “Fuel has gone up again” becomes a kind of routine that generates a well-established cycle of complaint and adaptation.
What is striking is how memes, humour, and viral content on social media have become a paradoxically expressive medium—at once serious and comic. Such content reflects the manner in which Indonesian society processes socio-economic pressure through cultural creativity and horizontal solidarity, whilst simultaneously revealing how deeply the fuel issue has become embedded in the popular consciousness.
VII. REFLECTIONS AND CONCLUSIONS
Having navigated five distinct analytical perspectives—ideological, political, economic, social, and cultural — we arrive at a conclusion that is paradoxical yet important: a Pertamax price increase is not merely a technical commodity price adjustment. It is a multidimensional event that reflects and reproduces fundamental choices about how this country wishes to be governed and in whose interests.
From an ideological perspective, every decision about the price of Pertamax contains an implicit answer to questions about the role of the state in the economy, the meaning of social justice, and intergenerational responsibility for environmental sustainability. From a political perspective, fuel price increases constitute a serious test of governmental legitimacy and the state’s capacity to manage public expectations.
Economically, the impact of Pertamax price increases resonates far beyond merely a rise in an individual’s petrol expenditure—it affects inflation, purchasing power, the viability of MSMEs, and the fiscal balance of the state. Socially, it reinforces existing fault lines of inequality and tests society’s adaptive capacity. Culturally, it touches identity, values, and the way in which society understands itself in relation to the state and the market.
More important than the question of whether a Pertamax price increase is right or wrong is a more fundamental question: does Indonesia possess a coherent, equitable, and sustainable national energy vision? A vision that is not merely reactive to global oil price fluctuations, but proactive in building an energy infrastructure that reduces dependence on fossil fuels, promotes the transition to renewable energy, and ensures that the burdens and benefits of that transition are borne equitably by all sections of society.
“Today’s rise in the price of Pertamax is not merely an economic figure. It is a harbinger of the collective choices we have made and will continue to make regarding the direction of development, social justice, and the legacy we leave to future generations.”
In the final analysis, the best response to Pertamax price increases is not mere protest or resignation, but a consistent demand upon the government to build an energy policy that is transparent, equitable, and far-sighted—one that does not merely calculate short-term fiscal costs and benefits, but also takes into account the social, ecological, and generational costs of every energy choice made.
Indonesia, with all its extraordinary natural resource wealth and vast renewable energy potential, possesses every means necessary to build a more independent, more equitable, and more sustainable energy system. What is required is the political courage to make difficult choices today for the sake of a better future for all its citizens.
REFERENCES AND SOURCES
The following represent key conceptual and empirical references pertinent to the themes addressed in this essay:
• Badan Pusat Statistik (BPS). Monthly Inflation Reports and Consumer Price Index. Jakarta: BPS.
• Bank Indonesia. Financial Stability Reviews and Indonesian Economic Reports. Jakarta: BI.
• Ministry of Energy and Mineral Resources (ESDM). Non-Subsidised Fuel Price Policy. Jakarta: Ministry of ESDM.
• PT Pertamina (Persero). Annual Reports and Fuel Price Adjustment Policies. Jakarta: Pertamina.
• Institute for Economic and Social Research (LPEM), University of Indonesia. Analysis of the Impact of Fuel Price Increases on Inflation and Poverty. Jakarta: LPEM UI.
• International Energy Agency (IEA). World Energy Outlook. Paris: IEA.
• Stiglitz, J. E. (2002). Globalisation and Its Discontents. New York: W. W. Norton & Company.
• Sadli, M. (1993). Economic Problems and Government Policy in Indonesia. Jakarta: LP3ES.
• Winters, J. A. (2011). Oligarchy. Cambridge: Cambridge University Press.
• Aspinall, E., & Mietzner, M. (Eds.) (2010). Problems of Democratisation in Indonesia. Singapore: ISEAS.
