Not Just WFH: Budget Reallocation Also Needed to Tackle the Energy Crisis

Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, stated that the government’s move to implement work from home (WFH) could influence a reduction in fuel oil (BBM) consumption and a decrease in greenhouse gas emissions, provided it is carried out on a massive scale as during the COVID-19 pandemic. “In my view, if the implementation of work from home is enforced massively, as during the PSBB or PPKM periods during COVID, of course the impact would be significant, even very significant, on the reduction of greenhouse gas emissions and fuel oil consumption,” he told Media Indonesia on Sunday (29/3). Furthermore, he noted that implementing WFH would burden workers, especially informal sector workers. “We know that 60% of our workforce is in the informal sector. Those working in the informal sector generally still need to be mobile because of the nature of their jobs; their wages and income depend on activities outside the home, and they also support people working in the formal sector. So on one side, there is a reduction in BBM consumption, but on the other side, there is also the potential for a decrease in income for those in the informal sector,” Faisal said. According to him, the government needs to consider a combination of WFH implementation that does not need to be massive, but takes into account the balance to support reducing BBM consumption. “So there needs to be a restriction on BBM usage, especially subsidised BBM. Not BBM overall, because we know that since 2025 the government has implemented restrictions on subsidised BBM consumption, so if this is done more strictly, that it is only given to those who are truly vulnerable, namely the lower-middle class groups who mostly use public transportation or two-wheeled motor vehicles, their BBM consumption will actually be more limited, and more restricted for four-wheeled vehicles,” he emphasised. A rather crucial matter, said Faisal, is to carry out refocusing and reallocation of the budget by taking funds from large priority programmes such as MBG and the Red and White Cooperative, which could actually be redirected to programmes or emergency response interventions, such as ensuring social safety nets for vulnerable groups and including maintaining or increasing subsidies, both BBM subsidies and electricity subsidies. “In this way, the state budget deficit can be kept in check, not exceeding 3%, but at the same time, the public, especially vulnerable groups, including the lower middle class whose purchasing power has declined so far, will not suffer major impacts from the current global conditions,” he stated. Separately, Director of the Center of Economic and Law Studies (CELIOS), Bhima Yudhistira, emphasised that the government must create an oil crisis mitigation package because the situation is already an emergency. “Regarding energy subsidies, they must be maintained not by raising BBM or LPG prices, but by shifting the budget first. There needs to be a discussion on revising the state budget in the DPR. There are expenditure positions that are not urgent and can be cut,” Bhima said. “The public, especially the lower middle class, is not ready to face BBM price increases. The effect could be a downward spiral leading to weakened purchasing power, rising poverty, and mass layoffs, which is too risky,” he added. He also suggested reducing BBM consumption through subsidies and making public transportation free. Bhima cited Spain, which since 2022 has made suburban trains and buses free to shift people from private vehicles to public transport. “The third programme is to accelerate the transition to renewable energy; 100 GW of solar panels should immediately replace villages using BBM-powered electricity plants. The portion of fossil energy must decrease. This is a momentum to replace fossils with energy that is more resilient to shocks,” he concluded. The work from home (WFH) policy of one day per week is seen as the government’s quick response measure to dampen the impact of global geopolitical turmoil, particularly the Middle East conflict. Jakarta Governor Pramono Anung affirmed that his side fully follows the central government’s policy regarding the implementation of work from home (WFH) for civil servants (ASN). East Java Governor Khofifah Indar Parawansa finally issued a Circular Letter (SE) on the implementation of the work from home (WFH) system for ASN in the East Java Provincial Government environment. Without activity restrictions like during the pandemic, the public will still travel. In addition to the WFH policy, observers emphasise the importance of government spending efficiency, especially on large programmes. Sectors dependent on physical mobility, such as transportation, offline retail, food and beverage in office areas, and hospitality, will be negatively impacted by WFH. The Cirebon City Government itself has carried out several efficiencies for savings, both energy savings and regional budget savings. Without activity restrictions like during the pandemic, the public will still travel. The South Tangerang City Government also refers to the Minister of PANRB’s Circular Letter as legitimate discretion to regulate the national workload after the long holiday. In addition to the WFH policy, observers emphasise the importance of government spending efficiency, especially on large programmes.