Oil price spike threatens to break Indonesia’s budget as 144 million hit the road for Eid

2026.03.17 10:50 People carry their belongings as they arrive for a free bus trip to their hometowns organised by the Jakarta provincial government in Jakarta, Indonesia, on Tuesday. Photo: AP Every year, roughly half of Indonesia’s 288 million people pack into trains, buses, ferries and cars and head home. The mudik, as the great Eid ul-Fitr exodus is known, is one of the largest annual human migrations on Earth and a ritual of return that defines the end of the holy fasting month of Ramadan. This year, the Ministry of Transportation estimates that 143.9 million journeys will be made. But it could hardly arrive at a worse time for the government’s finances. Oil prices have surged past US$100 per barrel amid the US-Israeli war on Iran, blowing well past the US$70 per barrel assumption Jakarta had baked into its latest budget assumptions. Motorists queue at a petrol station in Surabaya, Indonesia’s East Java province, on March 9. Photo: AFP In Monday morning trading, Brent crude rose as high as US$106.50 before settling at US$100.37. For Indonesia, a net oil importer that spends heavily to keep fuel affordable for its citizens, the numbers have become deeply uncomfortable. The government allocated 210.1 trillion rupiah (US$12.37 billion) for energy subsidies this year – but that figure was calibrated for a more stable world. Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, has already briefed President Prabowo Subianto on how bad it could get. In the best-case scenario – the Middle East conflict lasting five months with oil holding at US$86 per barrel – Indonesia would still record a budget deficit of 3.18 per cent of gross domestic product. That would breach the country’s legal deficit cap of 3 per cent, a fiscal rule that has long helped prop up investor confidence in Southeast Asia’s largest economy. An oil refinery is seen behind a mosque in Balikpapan, Indonesia’s East Kalimantan province. Photo: AFP The holiday travel surge is about t

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