The Influence of World Oil Prices and Inflation on Fuel Subsidies in Indonesia 2014-2022

Abstract

This study aims to analyze the influence of world oil prices and inflation on fuel subsidies (BBM) in Indonesia. Given the importance of fuel subsidies in maintaining the purchasing power of the public, this research utilizes secondary data from a specific period and analyzes it using descriptive methods and linear regression. The results of the descriptive analysis indicate that inflation has a positive and significant influence on fuel subsidies, while world oil prices do not have a significant effect. The coefficient of determination shows that approximately 73.03% of the variation in fuel subsidies can be explained by changes in inflation and world oil prices. The F-test affirms that inflation and world oil prices collectively influence fuel subsidies, but the t-test shows that only inflation has a significant effect. This research concludes that adjustments in fuel subsidy policies must consider inflation rates to maintain economic stability and public welfare. Therefore, it is recommended that the government be more responsive in formulating policies that take into account inflationary factors and conduct comprehensive studies on other factors influencing subsidies.