"As its impact (in Indonesia) will be seen from the cost of meeting the import of fuel oil, with 40 percent of needs still relying on imports," Deputy III Presidential Chief of Staff Panutan S. Sulendrakusuma said in a written statement issued here on Wednesday.
The increase in energy prices will affect logistics costs and trigger an increase in the price of imported commodities such as wheat, soybeans, corn, and cattle, he said.
This will have an effect on the costs of the food industry, restaurants, and catering entrepreneurs, he added.
"This has the potential to cause an increase in the rate of inflation," he said.
Hence, the government will implement anticipatory measures if the conflict between Russia and Ukraine continues, he added. Efforts to reduce the economic impact will include measures to maintain the stability of subsidized gas prices for the poor and not increase Pertalite fuel prices.
Sulendrakusuma said Indonesia's trade and investment relations with Russia and Ukraine have so far been relatively low.
Indonesia's trade balance with Russia was US$239.79 million, he elaborated. Meanwhile, Indonesia's trade value with Ukraine was minus US$623.89 million.
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"The conflict between Russia and Ukraine did not have a direct impact on the Indonesian economy. This is in line with Indonesia's minimal trade relations with the two conflicting countries," he said.
In general, the conflict between Russia and Ukraine could have a major impact on the global economy, including raising prices of energy, agricultural, and manufacturing products, he added.
Russia is the third-largest oil producer in the world and meets 11 percent of global oil demand. In addition, Russia is also the largest gas producer and the sixth-largest coal producer in the world.
“War will cause a spike in global oil, gas, and coal prices. The price of Brent oil has reached US$101.68 per barrel," he said.
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Translator: Katriana
Editor: Rahmad Nasution
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