DEN Reveals Details of New Subsidised Fuel Restriction Scheme

The government is preparing a new scheme for the distribution of subsidised fuel oil (BBM) to make it more targeted. One aspect includes restrictions on the purchase of subsidised Pertalite and diesel or Biosolar. National Energy Council (DEN) member Satya Widya Yudha stated that these restrictions will be based on vehicle type and engine capacity or cubic centimetres (CC). The Ministry of Energy and Mineral Resources is also revising Presidential Regulation (Perpres) No. 191 of 2014 on the Provision, Distribution, and Retail Price of BBM. He explained that the revision of Perpres 191/2014 is still in the government discussion stage. Satya said that restrictions based on vehicle type and engine capacity have the potential to save subsidised BBM consumption by 10-15% of the total distribution volume. “If based on CC and vehicle type, our calculation shows a potential saving of 10-15% of the volume,” he said. In addition to limiting subsidised BBM purchases, the government is also preparing a transformation of the 3 kg LPG subsidy from a commodity-based scheme to one based on beneficiaries. According to Satya, the distribution of subsidised LPG will later refer to data from the Acceleration of Extreme Poverty Eradication Programme (P3KE) and the Integrated Social Welfare Data (DTKS). “For the 3 kg LPG, the transformation to a subsidy based on people, using the aforementioned P3KE and DTKS data, will also result in savings,” he stated. He added that energy subsidy control strategies will be accompanied by consumption efficiency measures through accelerating transport electrification, developing public transport, and energy audits for large industries. On the supply side, the government is also promoting the optimisation of domestic market obligations (DMO) for coal and gas for PLN’s power plants, as well as increasing the mandatory B50 biodiesel to reduce diesel imports. “So on the demand side, we address it, on the supply side, we maximise DMO for coal and gas for PLN at domestic prices, utilisation of B50, God willing, we will slightly increase the productivity of palm oil, it can fill in but also maintain our export dominance, because palm oil is our flagship commodity,” he explained.