Database Overhaul Key to Energy Subsidy Reform
JAKARTA – Anissa Suharsono, Senior Policy Advisor at the International Institute for Sustainable Development (IISD), said that improving the database of subsidy beneficiaries is the key to successful energy subsidy reform. The step is considered important so that subsidies are better targeted while also maintaining fiscal stability and supporting the acceleration of the energy transition.
Anissa conveyed this view during a Kompas.com Talks discussion titled “The Urgency of Energy Subsidy Reform for Fiscal Stability and Energy Transition Acceleration” at the Kompas Gramedia building in Palmerah, Jakarta, on Tuesday (21/7/2026). According to her, energy subsidy reform must not be interpreted merely as a policy of raising fuel prices, but rather as a comprehensive overhaul of the subsidy distribution system.
“When we talk about energy subsidy reform, it should not immediately be taken to mean price increases. This is a reform of the system as a whole,” Anissa said, quoted on Wednesday (22/7/2026).
She explained that ideal reform begins with improving the beneficiary database, followed by designing compensation mechanisms, transparent public communication, and providing a complaints mechanism after the policy is implemented. Based on the experience of several countries, including India, subsidy reform should also be carried out gradually over a period of five to ten years to build public trust.
Andri Satrio Nugroho, Head of the Centre of Industry, Trade and Investment at INDEF, said subsidy reform needs to be accompanied by government transparency regarding the use of savings generated from the efficiency measures. According to him, the public must clearly understand the benefits obtained from reallocating subsidy spending to more productive sectors.
Andri also warned that leakage of energy subsidies remains substantial because affluent groups also enjoy various forms of subsidies. Therefore, low-income groups must remain a protection priority in every subsidy reform policy.
Meanwhile, Deputy Speaker of the People’s Consultative Assembly (MPR RI) Eddy Suparno said energy subsidy reform needs to prioritise the principles of right sizing and right targeting so that assistance genuinely reaches those entitled to it. He also encouraged changing the subsidy mechanism from commodity-based to direct transfers to beneficiaries, supported by a more accurate database.
“Subsidy reform is not about reducing protection for the people. This reform is about changing how the state protects its citizens so that it is fairer and more efficient,” said the figure, who is also a member of Commission XII of the House of Representatives (DPR RI).
Fitra Faisal, an expert staffer at the Government Communication Agency, added that the government remains committed to accelerating the energy transition through various clean energy development programmes. Meanwhile, Teguh Yudo Wicaksono, Dean of the Faculty of Economics and Business at the International Islamic University of Indonesia (UIII), viewed energy subsidy reform as homework that cannot continue to be postponed, as it relates to energy resilience, fiscal space, and national energy independence.