TEMPO.CO, Jakarta - Founder and CEO of Supply Chain Indonesia (SCI), Setijadi, estimates that diesel prices will increase by around Rp750-2,000 per liter due to the Israeli attack on Iran.
"The impact on Indonesia will occur through the transmission of global oil prices (Brent) to domestic diesel prices," he said in a written message on Sunday, March 1, 2026.
The United States (US) and Israel launched a military attack on Iran on Saturday, February 28, 2026. They targeted Iran's top leaders and plunged the Middle East into a wider conflict.
The increase in diesel prices could occur because the escalation of the conflict has the potential to cause disruptions in the Strait of Hormuz. This route carries approximately 20 percent of global oil consumption and 20-25 percent of global liquefied natural gas (LNG) trade. Consequently, international energy prices could spike if disruptions occur.
The range of diesel price increases calculated by Setijadi is based on a moderate scenario of a global oil price increase of US$25 per barrel. Global oil prices could even soar to US$50 per barrel in a more severe scenario.
Setijadi stated that diesel fuel is a major component of the operational costs of trucks, which are the backbone of national distribution.
Setiadji expressed concern that rising global oil prices due to the conflict in the Middle East would significantly increase distribution costs in Indonesia.
He estimated that a 30 percent increase in diesel fuel prices could lead to a 10.5 to 12 percent increase in freight costs. This increase is based on the assumption that fuel accounts for around 35–40 percent of total truck operating costs.
The increase in distribution costs will impact the price of goods. The average logistics cost in Indonesia is estimated at around 14 percent of the product price.
An increase in trucking costs above 10 percent could drive up prices of goods by nearly 0.8 percent, particularly for bulky and thin-margin commodities such as food, building materials, and fast food products.
Setijadi stated that Indonesian logistics still relies heavily on road transportation, making it relatively sensitive to diesel fuel prices. The biggest risk is inflationary pressure on distribution costs, particularly for food and basic necessities.
As a result, industries based on imported raw materials face a double risk. They are experiencing increased import costs due to soaring oil prices and rising domestic distribution costs.
Furthermore, the construction and MSME sectors are also relatively vulnerable due to high transportation costs and limited margins.
Given this vulnerability, Setiadji encouraged the government to maintain fuel price stability through adaptive fiscal policies and accelerated energy diversification.
He also recommended strengthening multimodal connectivity, particularly optimizing sea and rail transportation. Setiadji believes that strengthening distribution is crucial to reducing sensitivity to fluctuations in diesel prices.
He also emphasized the need for efficient distribution routes, cargo consolidation, and the implementation of fuel cost adjustment mechanisms in logistics contracts.
He believes that without structural reform of the logistics system, any global turmoil risks putting pressure on domestic prices and weakening public purchasing power.
Read: Four Flights at Bali Airport Affected by US Attack on Iran
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