Coordinating Economy Minister Airlangga Hartarto said on Monday that the government would not issue a regulation allowing for a deficit beyond the cap of 3 percent of gross domestic product until it “becomes clear how deep of a crisis it is”.

Asked to define “crisis”, Airlangga replied: “when the [oil] price increases by a lot and our subsidy buffer has thinned out”.

He suggested it may take months to determine whether a crisis was ongoing by pointing out that the government only issued a regulation in lieu of law (Perppu) for a deficit hike in the second half of 2020, months after the COVID-19 pandemic started.

The government subsidizes certain types of fuels to keep consumer prices at fixed levels, typically well below global market prices, and uses state budget funds to cover the difference.

The amount allocated for fuel subsidies is based on an assumed average oil price, US$70 in the 2026 budget plan, which means the state must spend more than planned on subsidies if the market price averages higher than the assumed level.

The ongoing United States-Israeli war against Iran has pushed the price of Brent crude oil to more than $100 per barrel from around $72 per barrel before the first missiles were fired on Feb. 28.