Energy Subsidy in 2027 State Budget Draft Rises 20.1% to Rp272.95 Trillion
The government has prepared an energy subsidy budget of Rp272.95 trillion in the 2027 Draft State Budget (RAPBN). This allocation represents an increase of approximately 20.1% compared with the 2026 energy subsidy outlook of Rp227.26 trillion.
“Next year’s energy subsidy will reach Rp272.95 trillion,” said Finance Minister Purbaya during a press conference on the Financial Note and the 2027 RAPBN on Tuesday (18/8).
Based on the Financial Note and the 2027 RAPBN documents, the government has designed a total subsidy expenditure budget of Rp387.88 trillion for the 2027 fiscal year. This ceiling is divided into energy subsidies amounting to Rp272.94 trillion and non-energy subsidies of Rp114.99 trillion.
These energy subsidies cover subsidies for certain types of fuel (JBT), 3 kilogram LPG canisters, and electricity. The government notes that energy subsidy realisation during the 2022–2025 period has fluctuated with an upward trend, from Rp171.86 trillion in 2022 to Rp185.17 trillion in 2025.
For JBT and 3 kg LPG subsidies, the government has allocated Rp142.84 trillion in the 2027 RAPBN. This budget is up 22.2% compared with the 2026 outlook of Rp116.85 trillion.
The JBT and 3 kg LPG subsidy policy in 2027 is directed towards continuing the fixed subsidy for diesel fuel of Rp1,000 per litre and the price-difference subsidy for kerosene. In addition, the government will continue transforming the 3 kg LPG subsidy from a commodity-based approach to a beneficiary-based approach.
Distribution will be integrated with accurate beneficiary data through technology-based data collection and the National Socio-Economic Single Data (DTSEN). The assumed volumes set include:
Meanwhile, the electricity subsidy budget in the 2027 RAPBN is planned at Rp130.11 trillion, up 17.8% compared with the 2026 outlook of Rp110.41 trillion. This increase is driven by higher basic electricity supply costs (BPP) and the volume of subsidised electricity.
The increase in BPP is influenced by fluctuations in the rupiah exchange rate against the US dollar, rising crude oil prices due to global geopolitical conflicts, and increased production from gas-fired power plants.
The government has confirmed that electricity subsidies will be directed towards eligible customer groups, such as poor and vulnerable households based on DTSEN, small businesses and industries, and the social sector. This policy will also be accompanied by the implementation of tariff adjustments for non-subsidised customers to maintain targeting accuracy and adapt to the economic conditions of the public.