Rising Oil Prices and What It Means for Us

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent 3 percent increase in global oil prices, driven by tensions between Iran and the Amerika Serikat, highlights how unstable the global situation currently is. While a 3 percent rise may seem small at first glance, its impact can be significant—especially for countries that still rely on imported oil, such as Indonesia.

This increase is not only caused by actual disruptions in oil supply, but also by market concerns. Whenever tensions rise in the Middle East, global markets tend to react quickly. There is a strong fear that key oil distribution routes could be disrupted, particularly the Selat Hormuz, one of the most important oil shipping lanes in the world. If this route were to be blocked or disturbed, global oil supply could drop sharply, pushing prices even higher.

This situation shows that oil prices are heavily influenced by political conditions, not just economic factors. As long as the world remains dependent on oil, conflicts in certain regions will continue to have wide-reaching effects. Even relatively small tensions can trigger immediate price increases.

For Indonesia, this is a situation that requires serious attention. As a country that still imports a portion of its oil needs, rising global prices will be felt directly. The government may face increased pressure to keep fuel prices stable. Otherwise, higher fuel prices could lead to broader increases in the cost of goods and services.

The impact does not stop there. Rising oil prices usually lead to higher transportation costs. When transportation becomes more expensive, the prices of basic goods often follow. In the end, it is the public—especially lower- and middle-income groups—who bear the greatest burden.

This pattern is not new. Almost every time there is conflict in the Middle East, oil prices rise. This reflects a deeper issue: the global energy system still depends heavily on regions that are politically unstable. This dependency makes the global economy vulnerable.

Therefore, this situation should serve as an important reminder for Indonesia. The country cannot continue to rely heavily on imported oil. Concrete steps are needed to reduce this dependence, such as developing alternative energy sources like solar, wind, and geothermal power.

In addition, improving energy efficiency is just as important. People can start with simple actions, such as reducing the use of private vehicles or using energy more wisely. Lower consumption can help reduce the impact of global price increases.

From the government’s side, energy policies need to be more forward-looking and decisive. It is not enough to respond only when prices rise; there must be long-term strategies to minimize future risks.

In conclusion, the rise in oil prices is not just a routine economic issue. It is a signal of global uncertainty that directly affects countries like Indonesia. Without proper anticipation and action, the impact could become more severe. That is why both the government and society need to adapt and work toward reducing dependence on unpredictable global conditions.

By : K&Co - April 22, 2026

Refusing Debt Is Bold, but Caution Still Matters

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The decision by Purbaya Yudhi Sadewa to reject loan offers from the International Monetary Fund (IMF) and the World Bank has drawn attention. The government argues that Indonesia’s fiscal condition is still strong, so there is no urgent need to take on additional debt.

At a basic level, this decision sounds positive. It suggests that Indonesia is still capable of funding its needs without relying on foreign loans. This can be seen as a sign that the country’s financial situation is stable, even as global conditions remain uncertain.

Refusing debt can also be a wise move. Loans are never truly free—they must be repaid, often with interest. If the funds are not urgently needed, taking on new debt could simply create a heavier burden in the future. By declining these offers, the government is trying to keep the country’s finances under control.

This decision may also boost national confidence. Indonesia appears to be signaling that it does not always need support from international institutions like the IMF or World Bank. This is important, especially considering that in the past, many countries faced serious problems due to excessive reliance on foreign debt.

However, this decision should also be viewed with caution. The global economic situation is still unstable. Many factors can change quickly, such as geopolitical conflicts, rising energy prices, or a slowdown in the global economy.

Even if Indonesia’s fiscal condition is currently strong, it may not remain that way forever. In the event of a major crisis, government spending needs could rise suddenly. In such situations, external financing—including loans—can become an important tool to maintain economic stability.

This is where balance becomes crucial. Refusing debt is reasonable, but it should not mean closing all options. The government still needs to prepare backup plans in case conditions worsen. Being confident is good, but overconfidence can be risky if it leads to delayed responses during a crisis.

More importantly, the issue is not just about accepting or rejecting debt, but about how well the country manages its finances. If government spending is efficient and well-targeted, the need for borrowing can be minimized. On the other hand, poor financial management can turn even small amounts of debt into serious problems.

Looking ahead, the government should also focus on strengthening state revenue, such as through taxation and economic growth. This would help reduce dependence on borrowing in the long term. In conclusion, rejecting loan offers from the IMF and World Bank is a bold and generally positive step. However, given the uncertainty of the global situation, caution remains essential. Confidence is important, but it must be supported by careful planning and responsible financial management. 

By : K&Co - April 22, 2026