Energy Subsidy and Compensation Spending Reaches Rp51 Trillion
Government spending on subsidies and compensation reached Rp51.5 trillion by 28 February 2026, equivalent to 11.5 per cent of the total subsidy and compensation budget allocation under the 2026 state budget, according to Deputy Finance Minister Suahasil Nazara.
“Realisation of subsidies and compensation has been influenced by fluctuations in the international crude price, depreciation of the rupiah exchange rate, and increases in the volume of fuel oil, liquefied petroleum gas, and electricity,” said Suahasil during a press conference on the 2026 state budget in Jakarta on Wednesday, 11 March 2026.
Of the total realisation, subsidy spending reached Rp7.4 trillion, whilst compensation payments totalled Rp44.1 trillion. The government has also begun implementing monthly energy compensation payments this year. This policy uses the state budget as a shock absorber to protect consumer purchasing power amid volatility in global energy prices.
According to Suahasil, global geopolitical dynamics pose a potential risk of increasing world oil prices and boosting energy subsidy requirements. Nevertheless, the government believes Indonesia has experience in managing energy price surges, including during the global energy crisis caused by the Russia–Ukraine conflict in 2022.
Beyond maintaining energy price stability, the government is also ensuring the availability of various subsidised goods for the public. Data from the Finance Ministry shows that the distribution volume of several subsidised commodities increased in 2026 compared with the previous year.
Distribution of subsidised fuel oil reached 1,647.9 thousand kilolitres, up 11.2 per cent from 2025’s realisation of 1,482.2 thousand kilolitres. Liquefied petroleum gas distribution of three-kilogram cylinders reached 740.9 million kilograms, up 7.5 per cent from the previous year’s 689.1 million kilograms.
The number of subsidised electricity customers also increased from 41.8 million in 2025 to 42.7 million in 2026, representing a rise of approximately 2.2 per cent.
In agriculture, distribution of subsidised fertiliser increased from 1.2 million tonnes in 2025 to 1.4 million tonnes in 2026, a growth of 16.6 per cent.
Additionally, the number of people’s business credit (KUR) borrowers increased from 0.5 million in 2025 to approximately 0.8 million this year, a rise of 42.5 per cent.
Suahasil emphasised that the government will continue monitoring global energy price developments and rupiah exchange rate movements to ensure that subsidy and compensation policies remain effective in maintaining economic stability whilst protecting public purchasing power.