Fuel Subsidy Reform Planned? Economist: The Key Lies in Data!

Jakarta, CNBC Indonesia - The government plans to tighten the criteria for buyers of subsidised fuel oil (BBM), particularly Pertalite, and subsidised 3 kg Liquefied Petroleum Gas (LPG). This is because energy subsidies have so far been widely enjoyed by affluent groups, making distribution poorly targeted. In addition, the state budget burden for energy subsidies has continued to increase year on year. The government sees the need to rearrange distribution so that the subsidy budget for Pertalite and 3 kg LPG does not further burden state finances.

Responding to the plan, the Institute for Development of Economics and Finance (INDEF) stressed that data integration is the main key for energy subsidy reform in Indonesia to succeed. Unifying data is considered important so that the shift of subsidies from products to direct recipients becomes more accurate. The step also aims to prevent conflict when the new policy begins to be implemented.

INDEF Director of International Collaboration Imaduddin Abdullah assessed that improvements in recipient data are now getting better thanks to the integration of various sectoral data. However, he suggested the government immediately conduct trials in several regions to ensure the accuracy of the synchronised data. “That is why I think data is the key, and if we choose from the three energy subsidies—electricity, LPG and fuel subsidies—I think the first that can be done is electricity. Because electricity data is relatively better than LPG and fuel,” he said in CNBC Indonesia’s Energy Corner programme, quoted Friday (28/8/2026).

Currently, the government is beginning to integrate various databases such as the Integrated Social Welfare Data (DTKS), Socio-Economic Registration (Regsosek), and the Targeting for the Acceleration of Extreme Poverty Elimination (P3KE) to strengthen the accuracy of beneficiary targeting. According to him, this effort is urgent considering that the realisation of energy subsidies and compensation up to June 2026 has reached Rp 233 trillion.

“And I think the experience of other countries also shows that when the data is tidy and the data is indeed connected, the key is integrated data. If that can be resolved, there should be no obstacle to shifting from commodities to people,” he said.

He assessed that the absence of precise data so far has resulted in subsidy allocation being poorly targeted, with affluent groups in deciles 9 and 10 consuming 42% of total subsidised fuel. Imaduddin said that without improvements to the data collection system, the state fiscal burden is projected to continue swelling to reach Rp 526 trillion by the end of 2026.

“Do not let a shift occur but the people who should be entitled do not feel the compensation. That is why I think data is the key,” he stressed.

Previously, PT Pertamina Patra Niaga and the Directorate General of Population and Civil Registration (Ditjen Dukcapil) of the Ministry of Home Affairs signed a Cooperation Agreement on the Granting of Access Rights and Utilisation of Population Data within the scope of PT Pertamina Patra Niaga services, at Graha Pertamina, Jakarta, Monday (10/8/2026).

The cooperation is expected to strengthen the verification and validation process of data to support more targeted distribution of subsidised energy. The agreement also supports the implementation of Minister of Energy and Mineral Resources Decree Number 37 of 2023 concerning Technical Guidelines for the Transformation of Targeted LPG Subsidies, as well as serving as the basis for the system integration that Pertamina Patra Niaga has prepared for NIK validation in the distribution of 3 kg LPG.

The agreement was signed by Director General of Dukcapil of the Ministry of Home Affairs, Teguh Setyabudi, and President Director of PT Pertamina Patra Niaga, Mars Ega Legowo Putra. Also present and witnessing were Director General of Oil and Gas of the Ministry of Energy and Mineral Resources, Laode Sulaeman, and Director of Logistics & Infrastructure of PT Pertamina (Persero), Jaffee Arizon Suardin. This cooperation strengthens synergy between parties in supporting more targeted data-based energy distribution.

President Director of Pertamina Patra Niaga Mars Ega Legowo Putra said this cooperation is Pertamina’s effort through Pertamina Patra Niaga to strengthen subsidy distribution governance while maintaining energy services to the public throughout Indonesia.

“Pertamina Patra Niaga is committed to realising the government’s goal of ensuring energy security with good subsidy governance and ensuring energy services reach the public from Sabang to Merauke,” said Mars Ega in a written statement, Tuesday (11/8/2026).

Meanwhile, Director General of Population and Civil Registration of the Ministry of Home Affairs Teguh Setyabudi explained that population data is an important basis for various public services. Up to the first semester of 2026, Indonesia’s population was recorded at around 290.1 million people with nearly 99 percent of residents required to have ID cards having been biometrically recorded.

“We appreciate the cooperation with Pertamina Patra Niaga. We hope the utilisation of this population data will not only support the distribution of subsidised 3 kg LPG to be more targeted, but can also be used for various other needs in supporting the duties and services of Pertamina Patra Niaga,” explained Teguh.

With the cooperation between Pertamina Patra Niaga and Ditjen Dukcapil, it is hoped that energy services will improve and benefit the public.