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Abstract
This research aims at analyzing the effect of the change of oil price (BBM) on inflation rate in Indonesia. The main data used were the change of oil price and inflation rate taking period of 34 years ranging from April 1979 to June 2013. The result of regression analysis shows that the effect of the change of oil price (BBM) on the inflation rate in Indonesia is positive. It can be concluded that an increase of the oil price by 1 % will lead to an increase of infaltion rate by 0,51%. The effect of the oil price is more dominant on the rate of inflation which is grouped in expenditures for raw materials of food, tranportation dan communication than on inflation rate of other group of expenditures.
Keyword: The Change of Oil Price (BBM) and Inflation Rate.
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