Energy Subsidies and Compensation Surge 382.6% in February 2026

Jakarta — Indonesia’s spending on energy subsidies and compensation experienced rapid growth in the first two months of 2026 compared to the same period in 2025.

By the end of February 2026, subsidy and compensation spending reached Rp 51.5 trillion, equivalent to 11.5% of the 2026 national budget target. However, this represents a surge of 382.5% compared to February 2025.

The increase was primarily driven by compensation spending, which reached Rp 44.1 trillion, whilst subsidy spending stood at only Rp 7.4 trillion, lower than the comparable period last year’s Rp 10.7 trillion.

“The Rp 44.1 trillion reflects our commitment to systematically pay down compensation debt from 2025, which is why subsidy and compensation spending increased sharply at the beginning of 2026, whereas 2025 consisted purely of subsidy spending,” said Deputy Finance Minister Suahasil Nazara during a press conference at his office in Jakarta on Wednesday, 11 March 2026.

Overall, the realisation of subsidy and compensation spending was also influenced by fluctuations in Indonesian crude oil prices, rupiah depreciation, and increased consumption volumes of fuel, liquefied petroleum gas, and electricity.

The Ministry of Finance noted that oil price volatility has occurred due to global geopolitical dynamics, thereby increasing energy subsidy realisations, although Indonesia has experience managing such conditions, including during the energy price surge following the Russia-Ukraine conflict in 2022.

Specifically, by the end of February 2026, fuel subsidies comprised 1.64 million kilolitres, an increase of 11.2% from the realisation in the same period last year of 1.48 million kilolitres.

For 3-kilogramme liquefied petroleum gas, the realisation was 740.9 million kilogrammes, up 7.5% from February 2025’s 689.1 million kilogrammes. Subsidised electricity also increased from 41.8 million customers to 42.7 million, representing growth of approximately 2.2%.

For fertiliser subsidies, the realisation by the end of February 2026 was 1.4 million tonnes, up 16.6% from the same period last year’s 1.2 million tonnes, and the number of People’s Credit Scheme debtors also rose to 0.8 million, representing 42.5% growth from last year’s 0.5 million.