Ministry of Energy calculates energy compensation and subsidy surge could reach Rp300 trillion

Jakarta (ANTARA) - The Ministry of Energy and Mineral Resources (ESDM) has calculated that the surge in energy compensation and subsidies could reach Rp300 trillion above the previously allocated budget due to geopolitical conflicts.

“We at the Ministry of ESDM have calculated the impact of this increase; if we do not anticipate this with the availability of new and renewable energy, the consequence will be an increase in compensation and subsidies, which could rise by approximately Rp300 trillion from the initial Rp400 trillion,” stated Deputy Minister of ESDM, Yuliot, during The 12th IndoEBTKE ConEx 2026 held in Jakarta on Wednesday.

Yuliot stated that this expansion is caused by geopolitical instability, particularly the conflict between the United States and Iran, which has caused disruptions to the global energy supply chain.

In addition to the conflict between the US and Iran, Yuliot also noted that the tensions between Ukraine and Russia have not yet ceased.

Furthermore, Yuliot explained that the impact of rising energy costs includes surges in inflation, production costs, and other related factors. Therefore, the spike in energy commodity prices has the potential to trigger an overall macroeconomic crisis.

Consequently, the government is currently pushing for the increase of new and renewable energy (EBT). The expansion of renewable energy has become part of the government’s priority programme outlined in ‘Astacita’, which aims to strengthen the national defence and security system and promote national independence through energy self-sufficiency.

“From our perspective, energy self-sufficiency and downstreaming will increase energy supply and expand access and reach to energy for both industry and society as a whole,” said Yuliot.