IESR: Electrification and Reduction of Subsidised Fuel Offer Multiple Benefits
The independent research institute Institute for Essential Services Reform (IESR) assesses that the government’s plan to accelerate electrification and reduce subsidised fuel can deliver multiple benefits.
“IESR welcomes the government’s commitment to gradually reduce fuel subsidies through accelerating transport electrification and providing incentives for domestically produced electric motorcycles,” said IESR Chief Executive Officer Fabby Tumiwa in a statement in Jakarta on Friday.
According to him, the policy can provide multiple benefits in the form of reduced energy imports, improved urban air quality, and the development of the national electric vehicle industry.
He also proposed that the transformation towards electric energy and the reduction of subsidised fuel needs to be implemented fairly and in a planned manner, highlighting several points, namely protection for vulnerable groups and improving the quality of public transport.
“Without decarbonising the electricity sector, the full benefits of transport electrification will not be optimal,” he added.
IESR views President Prabowo Subianto’s speech as conveying a number of important breakthroughs, especially in the fields of solar energy, transport electrification, public spending efficiency, and basic infrastructure development.
Furthermore, he said that the biggest challenge is no longer vision but also policy consistency, transparent governance, and the courage to carry out the necessary structural reforms so that these targets can be achieved.
Previously, President Prabowo Subianto said he would accelerate the electrification of public mobility in delivering the Government’s Introduction/Statement on the Bill on the 2027 State Budget and its Financial Note in Jakarta on Friday.
In addition, he also announced that incentives would be provided for one million electric motorcycles produced domestically by Indonesian entrepreneurs.
“This policy has three objectives at once, namely reducing vehicle costs for the people, reducing consumption of imported fuel, and growing the national electric motorcycle industry along with its supply chain of batteries, components, software, and after-sales services. This incentive is an investment to make the Indonesian people the first market for the works of Indonesian children,” he said.
According to him, the presence of Indonesian-made electric motorcycles on the roads represents three victories at once, namely savings for families, reduced energy imports, and jobs for the nation’s children.