Constitutional economist Defiyan Cori stated that the subsidized and non-subsidized prices imposed by the government on certain commodities, including energy, represent a form of state protection for the public. This can be compared with other commodities, such as water, which do not receive the same state protection but whose price increases rarely trigger public protests. Yet water is also a basic necessity for the population.
He explained that, in economic theory, the law of cause and effect applies. A general principle, for example, is that demand and supply are strongly influenced by the quantity of a commodity available. When demand increases, prices are certain to rise; conversely, when supply is abundant, prices tend to fall. Price volatility is also influenced by domestic and international geopolitical situations and conditions.
However, global economic prices serve as benchmarks for certain commodities and remain a point of reference. This is especially true when domestic production cannot meet consumption needs for commodities traded on the world market. In other words, the country must import these commodities from other countries whose production exceeds their domestic consumption. Furthermore, geopolitical pressures, such as the conflict involving the United States, Israel, and Iran, clearly have a significant impact on fluctuations in global oil prices.
“Clearly, there are exceptions when it comes to certain commodities or important branches of production that control the livelihoods of many people, over which the state has authority. From this perspective, the government must intervene in accordance with Article 33, Paragraph 2 of the 1945 Constitution. The question is how the public should respond to fluctuations in the economic prices of commodities traded on the global market, particularly oil and gas and fuel? This applies not only to oil, gas, and fuel, but also to commodities such as coal, nickel, and bauxite, whose prices are determined by global market mechanisms,” Defiyan said in a statement on Tuesday, October 13, 2026.
He stated that when commodity prices are left to market mechanisms, the laws of supply and demand for goods and services will apply. Oil, gas, and fuel are no exception. Moreover, Indonesia has been a net importer since 2002. Therefore, the government provides subsidies for certain types of fuel, specifically for certain groups of consumers and members of the public.
“If market mechanisms and global economic prices were allowed to determine fuel prices, the prices of Pertalite and diesel fuel would be far above the government-set prices of IDR 10,000 and IDR 6,800, respectively. This is one example of government intervention in the commodity market for goods that are essential to people’s livelihoods. The purpose is to prevent commodity price fluctuations from disrupting market equilibrium, allowing the national economy to continue operating stably while keeping the prices of basic commodities affordable for the public,” he explained.
Defiyan explained that PT Pertamina (Persero), as a state-owned enterprise (SOE), must comply with the prices set by the government through the Ministry of Energy and Mineral Resources. In this case, despite fluctuations in global economic prices for oil, gas, and fuel, subsidized fuel prices have not increased. Only non-subsidized fuel prices have adjusted to global price fluctuations. These adjustments affect consumers with greater purchasing power or those who consciously choose fuel with an octane rating of RON 92 or higher, such as the Pertamax series.
He therefore encouraged the public to compare these commodities, which are essential to people’s livelihoods, with other products such as water and basic food products, including instant noodles, which are also important goods.
“Market mechanisms also apply to bottled and gallon-sized mineral water products from various brands, which have also experienced price fluctuations. Most of these products are not controlled by the state through SOEs but by private corporations. When their prices rise, why don’t consumers protest against the producers? After all, the profits earned by these private companies do not go into state coffers. In addition, there are no subsidized product options offered to consumers who cannot afford them,” he said.
In contrast, he continued, state-owned enterprises contribute not only through taxes but also through dividends, which return to the public through development programs. Meanwhile, private corporations distribute all the profits they generate to their shareholders, with only tax payments going to the state. Furthermore, the government has granted various privileges to private corporate groups and business tycoons, including access to bank financing.
“That is why consumers should adopt a more reasonable and fair attitude toward commodities controlled by state-owned enterprises such as Pertamina and PLN, in accordance with their constitutional mandate. Subsidized and non-subsidized prices, in response to fluctuations in oil, gas, fuel, and electricity prices linked to coal prices, are a form of state protection for its people. This protection is a constitutional obligation under Article 33 of the 1945 Constitution. The state’s authority over important branches of production finds its relevance when market prices experience volatility,” Defiyan emphasized.
He also called for strict government oversight to ensure that subsidized goods—including fuel, electricity, and other basic food necessities—are distributed to people who cannot afford them.
“There is still a considerable gap between subsidized and non-subsidized prices that certain individuals can exploit. Therefore, the law must be enforced as firmly as possible against those who manipulate these price differences and divert subsidized goods away from their intended beneficiaries,” he concluded.
