Expert Reveals Misfired Fuel Subsidies, Private Vehicles Absorb 93 Percent

Indonesia’s energy resilience faces serious challenges due to uneven patterns of petroleum fuel (BBM) consumption. An academic from the Civil Engineering programme at Unika Soegijapranata and advisor to the Indonesian Transportation Society (MTI), Djoko Setijowarno, citing data from the Ministry of Energy and Mineral Resources (ESDM), revealed that the transportation sector absorbs 91.2 percent of national BBM consumption, yet the distribution of subsidies within it misses the primary target. This situation serves as an alarm for the country’s fiscal stability amid President Prabowo Subianto’s ambitions to achieve energy self-sufficiency. The government aims to stop importing BBM within two to three years through massive electrification programmes and the construction of electric vehicle factories. Data from the 2024 Handbook of Indonesian Energy and Economic Statistics shows that BBM consumption has continued to rise post-pandemic, peaking at 82,319 thousand kilolitres in 2024. The land transportation sector is the largest contributor, accounting for 90 percent of total energy consumption in the mobility sector. Djoko also highlighted the injustice in the long-standing distribution of energy subsidies. According to Djoko, energy subsidies enjoyed by the middle to upper classes using private cars and motorcycles pose a serious threat to the state budget. He urged the government to immediately reform subsidies to truly target public transport and logistics through a digitalisation system for data verification. Although the government is promoting migration to electric-based public transportation, the reality of budget policies shows the opposite trend. Allocations for land transportation services subsidies have shrunk drastically. After reaching Rp 582.98 billion in 2023, the budget is planned to drop to just Rp 82.6 billion in 2026. “Larger budget allocations are needed, along with incentives or Special Allocation Funds (DAK) from the Directorate General of Land Transportation for new regions,” added Djoko.