Fuel Subsidies Miss Their Target, Here's the Economic Data

Jakarta, CNBC Indonesia - Energy subsidies, including fuel subsidies, are still considered to be poorly targeted. This is because the majority of subsidised fuel consumption is actually enjoyed by groups of people who are classified as well-off.

Director of International Collaboration at the Institute for Development of Economics and Finance (INDEF) Imaduddin Abdullah said that the issue of targeting accuracy is one of the reasons the government needs to limit consumption of Pertalite fuel.

According to him, of the several factors that influence the size of energy subsidies, domestic consumption is one aspect that the government can still control.

“That is why I think there is a plan to limit the use of, what is it called, Pertalite consumption, which is very important. Why? Because this is the next problem with our subsidies,” said Imaduddin in CNBC Indonesia’s Energy Corner programme, quoted on Friday (28/8/2026).

He also revealed that the main problem with fuel subsidies today is their inaccuracy in targeting. Based on the data he has, people in the 9th and 10th decile groups, or the well-off groups, still account for a large share of fuel consumption.

“Because the data shows that decile 9 and decile 10, which we categorise as the well-off group, their fuel consumption reaches around 42%. So almost half of fuel consumption is consumed by the upper middle class,” he said.

Previously, the Ministry of Energy and Mineral Resources (ESDM) was still reviewing the types of vehicles that would not be allowed to use Pertalite fuel.

Director General of Oil and Gas at ESDM Laode Sulaeman said that his party had not yet determined or announced the specifications of vehicles that would be restricted from using Pertalite. “I am currently preparing the meeting,” said Laode at the DPR RI building on Wednesday (26/8/2026).

According to Laode, discussions regarding restrictions on Pertalite use are still ongoing. Thus, the government has not announced the final results regarding the types and specifications of vehicles that will fall into the restriction category.

“After the meeting between the Minister of Energy and Mineral Resources and the Minister of Finance, we have not announced anything. But we are reviewing it and will announce it later,” he said.