The Indonesian government has stated that authorities are planning to limit energy consumption and increase the production of renewable energy, aiming to save 80 trillion rupiah (18.589 billion ringgit) in energy expenditures to mitigate the impact of the Middle East war on Indonesia's economy.
In a recorded interview last week, Indonesian President Prabowo said the government is striving to control energy consumption and increase the production of renewables such as solar energy to reduce costs.
Indonesia is also considering a series of fuel-saving measures, including having government and public sector employees work remotely one day a week. However, specific details are still being finalized and will take effect soon.
The Indonesian government has previously insisted that Prabowo's signature free meal program will remain unchanged, with a budget of US$19.7 billion (77.587 billion ringgit) this year.
The Middle East conflict has caused global oil prices to soar. The Indonesian government is currently continuing its fuel subsidy policy, covering about 30% to 40% of consumers' fuel costs, which accounts for about 15% of the budget.
Although Indonesia is an oil-producing country, it also imports a large amount of oil and has long relied on government subsidies to keep domestic oil prices low. In this year's budget, energy subsidies and funds allocated to state-owned energy enterprises reach as high as 381.3 trillion rupiah (88.602 billion ringgit). The non-profit think tank, Institute for Essential Services Reform, estimates that for every US$1 (3.94 ringgit) increase in international oil prices, the government has to pay about 7 trillion rupiah (16.26 billion ringgit) more in subsidies.