Deputy Finance Minister: Energy Subsidy Policies Will Continue to be Improved

Bogor (ANTARA) - Deputy Finance Minister Juda Agung stated that energy subsidy policies will continue to be improved to ensure they are increasingly well-targeted.

“I believe that these targeted subsidy policies are already in the pipeline, whether for electricity, fuel (BBM), or LPG (Liquefied Petroleum Gas). Currently, some aspects are not yet truly well-targeted. This is what will continue to be improved so that subsidies truly hit their intended targets,” he said during the Ministry of Finance Media Gathering in Bogor, West Java, on Thursday.

On that occasion, he explained that the movement of the Indonesian Crude Price (ICP) has a direct correlation with the budget deficit posture. For every increase in the ICP of approximately US$6.1, it is estimated to impact the deficit by an increase of Rp6.8 trillion due to the surge in subsidy burdens.

This rise in energy costs is deemed to require effective control measures so as not to constrain fiscal flexibility. Therefore, the scheme for targeted energy subsidy policies will continue to be refined so that the benefits are truly felt by the public.

Previously, the government and the House of Representatives (DPR RI) agreed on an energy subsidy budget in the 2027 State Budget (UU APBN) of Rp261.5 trillion, which is a decrease of Rp11.44 trillion compared to the previous allocation of Rp272.94 trillion.

The budget reduction primarily stems from subsidies for fuel and 3kg LPG cylinders, which were agreed at Rp131.39 trillion, down from the previous Rp143.84 trillion.

Meanwhile, the electricity subsidy budget remains at Rp130.11 trillion. Consequently, the total energy subsidy in the 2027 State Budget reaches Rp261.5 trillion.

According to him, with the improvement of recipient data to be more accurate, this step is considered capable of rectifying the errors in subsidy recipients that have persisted for years.