JakartaGlobe-Jan 8
The Indonesian government is formulating a new energy subsidy scheme to better target assistance toward those who need it most, Energy and Mineral Resources Minister Bahlil Lahadalia announced on Tuesday. Indonesia currently provides substantial subsidies for electricity, fuel, and cooking gas to support low-income families. These subsidies include special tariffs or affordable products like the widely used 3-kilogram liquefied petroleum gas (LPG) canisters, often referred to as “melon canisters,” and subsidized gasoline and diesel fuel distributed by state-owned oil company Pertamina. Critics argue that the existing subsidy system fails to effectively reach its intended beneficiaries. For instance, cheaper gasoline and diesel prices often benefit car owners who may not fall into the low-income category. Bahlil acknowledged these shortcomings, emphasizing the need for a more precise subsidy distribution mechanism.
The new subsidy scheme is being designed to ensure that assistance reaches those who need it most. It may involve a mix of cash aid and essential goods, Bahlil said, though he did not provide further specifics. The minister stressed the importance of utilizing accurate and up-to-date data from the Central Statistics Agency (BPS) to eliminate overlaps and ensure proper targeting.
“We aim to centralize all data at BPS to prevent subsidies from benefiting the wrong recipients. The new scheme will be announced later this year once the data compilation process is complete,” Bahlil said during a visit to the Oil and Gas Upstream Regulatory Body (BPH Migas) office in Jakarta. The new subsidy scheme aims to balance financial sustainability with the government’s commitment to assisting vulnerable communities, providing a more equitable distribution of resources while reducing fiscal strain. Read more at:
https://jakartaglobe.id/business/government-drafts-new-energy-subsidy-scheme
