Rising Industrial Diesel Prices Squeeze Businesses, APINDO West Sumatra Says Hotels and Manufacturers Hit Hard
Monday, 20 April 2026
PADANG — The increase in non-subsidized fuel prices, particularly industrial diesel, is having a significant impact on businesses in West Sumatra, according to the Indonesian Employers Association (APINDO).
Chair of APINDO West Sumatra, Rina Pangeran, said the hike is most acutely felt by industries heavily reliant on diesel, especially for backup operations such as generators.
“The biggest impact comes from industrial diesel. The business sector is heavily affected, including hotels and manufacturing. They must keep generators on standby during power outages, and that runs on diesel,” Rina said in an interview on Monday (April 20, 2026).
She noted that the price of industrial diesel has risen from Rp28,150 to Rp30,550 per liter—an increase of around Rp2,400 per liter—excluding value-added tax (VAT).
“With an additional 10 percent VAT, the burden on industry becomes even heavier,” she added.
According to Rina, the price surge has directly driven up operational costs across multiple sectors, including manufacturing, hospitality, logistics, and mining.
As a result, businesses are being forced to adjust their selling prices to offset the increased expenses.
“The impact is substantial. Operational costs are rising, and inevitably, selling prices follow,” she said.
Rina further highlighted that the situation is unfolding amid weakening consumer purchasing power, which could further strain overall business performance.
“Purchasing power is currently soft. If selling prices increase as well, this will add further pressure on businesses,” she explained.
Beyond industry, the rise in non-subsidized fuel prices is also affecting logistics and transportation companies, which are expected to face higher distribution costs.
“Logistics and transportation costs will inevitably rise. This is a chain reaction,” she said.
She emphasized that the industrial sector remains the most affected, as higher operational costs translate directly into higher market prices.
“The most significant impact is on industry. Costs go up, prices follow, while purchasing power declines,” she reiterated.
In response, APINDO West Sumatra has called on the government to take strategic measures to ease the burden on businesses, including temporarily exempting industrial diesel from VAT while prices remain elevated.
“We hope the government can temporarily waive VAT on industrial diesel, especially as this increase is driven by constraints in fuel imports due to global conditions,” she concluded.
Source: padang.tribunnews.com
