The energy subsidy and compensation scheme in Indonesia is still\nbased on commodities, not on the communities receiving the benefits.\nThis condition makes the government\u2019s fiscal burden vulnerable to\nswelling when energy commodity prices rise.<\/p>\n
Principal of Energy Shift Institute Ahmad Zuhdi Dwi Kusuma assesses\nthat the current subsidy and compensation system is still attached to\nenergy commodities, so price fluctuations can directly impact the state\nbudget.<\/p>\n
\u201cThe problem is, we see that the subsidy and compensation system in\nIndonesia is attached not to people, not to the community, but to\ncommodities,\u201d he said in the Energy Corner programme on CNBC Indonesia,\nquoted on Friday (28\/8\/2026).<\/p>\n
Therefore, according to him, when there is an increase or fluctuation\nin energy commodity prices, the fiscal space that had previously been\nset through the State Revenue and Expenditure Budget (APBN) becomes more\nvulnerable to changes.<\/p>\n
As a result, the subsidy budget that the government has prepared\npotentially no longer suffices to hold back price increases. The\ngovernment must then rely on a compensation scheme to cover the\ndifference.<\/p>\n
\u201cAnd when people who are not entitled to receive these subsidies get\nthem, then the question arises as to where justice lies and so on,\u201d he\nsaid.<\/p>\n
As is known, the administration of President Prabowo Subianto has\nprepared a budget for subsidies for certain types of fuel oil (BBM) in\nthe 2027 Draft State Budget (RAPBN) that is higher than the estimated\nrealisation in the 2026 APBN.<\/p>\n
In the Financial Note document along with the 2027 RAPBN, the value\nof the subsidy budget for certain types of fuel, such as Pertalite and\ndiesel, is Rp28.7 trillion, up around 8.71% compared to the 2026 outlook\nof Rp26.4 trillion.<\/p>\n
\u201cIn addition, to improve the efficiency of subsidy spending, the\ndistribution of subsidised fuel is carried out with consumer\nregistration,\u201d as quoted from the Financial Note document along with the\n2027 RAPBN, Sunday (15\/8\/2026).<\/p>\n
The increase in the fuel subsidy budget goes hand in hand with the\nrise in total energy subsidies. This includes the subsidy budget for\n3-kilogram LPG cylinders and electricity subsidies.<\/p>\n
The draft energy subsidy budget for 2027 itself reaches Rp272.94\ntrillion, an increase of 20.1% compared to the 2026 outlook of Rp227.25\ntrillion.<\/p>\n
The subsidy budget for 3 kg LPG also rises to Rp114.1 trillion from\nthe 2026 outlook of Rp90.4 trillion, and electricity subsidies rise to\nRp130.1 trillion, from the estimated 2026 realisation of Rp110.4\ntrillion.<\/p>\n
The calculation of the budget for certain types of fuel subsidies and\n3 kg LPG cylinders in the 2027 RAPBN uses assumptions and parameters,\nincluding:<\/p>\n
the rupiah exchange rate against the US dollar and the Indonesian\nCrude Price (ICP);<\/p><\/li>\n
a fixed diesel subsidy of Rp1,000 per litre;<\/p><\/li>\n
a volume of certain types of diesel fuel of 19,558.5 thousand\nkilolitres and kerosene of 539.0 thousand kilolitres; and<\/p><\/li>\n
a volume of 3 kg LPG cylinders of 8,945.0 million kg.<\/p><\/li>\n<\/ol>\n
Meanwhile, the increase in the electricity subsidy allocation is\nmainly influenced by the increase in the basic cost of electricity\nsupply (BPP) and the increase in the volume of subsidised electricity.\nThe rise in BPP is caused, among other things, by:<\/p>\n
changes in the rupiah exchange rate against the US\ndollar;<\/p><\/li>\n
changes in crude oil prices (ICP) due to global geopolitical\nconflicts; and<\/p><\/li>\n
increased production at gas-fired power plants.<\/p><\/li>\n<\/ol>", "url": "https:\/\/jawawa.id\/newsitem\/energy-subsidies-still-commodity-based-heres-the-danger-for-indonesia-1787928638", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }