Luhut States Energy Subsidies Drain Rp300 Trillion Annually: 62% Enjoyed by Wealthy
The Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, has disclosed that a significant portion of the energy subsidies provided by the government is currently being enjoyed by wealthy segments of society. This statement was made by Luhut following a Hearing (RDP) with the House of Representatives’ National Financial Accountability Agency (BAKN).
Luhuit noted that the government allocates an energy subsidy budget of more than Rp300 trillion annually, yet the distribution remains poorly targeted. “From the data we have gathered, it shows that the energy subsidy burden remains above Rp300 trillion per year. Ironically, approximately 62.9% is actually enjoyed by the wealthy group of society. This is clearly unfair and requires a restructuring of subsidy targets,” he stated via his official Instagram account on Tuesday, 9 June 2026.
Currently, government energy subsidies cover several sectors, including fuel (BBM), 3kg LPG cylinders, and electricity tariffs for specific groups. Luhut mentioned that reforming electricity subsidies is one of the primary agendas being prepared by the DEN. This move, he said, aligns with the directives of President Prabowo Subianto, who emphasises the importance of increasing efficiency and transparency in government governance.
“That is why one of our main focuses that we are currently maturing is the reform of electricity subsidies,” he explained.
He assessed that the current subsidy pattern, which is provided in the form of goods, needs to be redirected towards direct assistance to eligible individuals. To support this transition, the DEN plans to utilise the National Socio-Economic Single Data (DTSEN), as mandated by Presidential Instruction (Inpres) Number 4 of 2025. According to Luhut, the use of DTSEN aims to ensure that social protection and government assistance are more focused on low-income groups.
He explained that these efforts are supported by an integrated digital system, ranging from the Social Protection (Perlinsos) portal to biometric verification mechanisms based on GovTech. Through such a system, the government hopes to reduce complex bureaucratic processes while minimising the potential for data misuse. “Through a transparent system, we can save the state treasury up to Rp29.9 trillion per year while ensuring that the allocation of the state budget is precisely targeted,” he added.