Prabowo Maintains Fuel Subsidies for One Year, Wealthy Obliged to Pay Market Prices
The government faces a policy dilemma with no truly comfortable option.
President Prabowo Subianto has affirmed that the government will maintain subsidies for fuel oil (BBM) over the next 12 months, but distribution will be tightened to ensure only those truly entitled benefit. Affluent groups are required to pay market prices for BBM.
The statement was delivered by Prabowo during a briefing at the Red and White Cabinet Working Meeting at the Presidential Palace in Jakarta on Wednesday (8/4). He described the coming year as a critical phase that must be navigated with measured steps, particularly amid global pressures on the energy sector.
“For the short term, which I consider critical, this year, the next 12 months, we must control fuel consumption. After 12 months, we will be very strong,” Prabowo stated.
According to him, Indonesia’s position is relatively secure because national oil and gas supplies do not heavily rely on global strategic routes like the Strait of Hormuz. The government is also preparing alternative supply options, while relying on the strength of domestic energy resources.
“The main point now is that we are ready, we are strong to face this year. Our oil and gas sources do not pass through the Strait of Hormuz too much, we can find other alternatives, besides having very strong domestic strength,” he said.
In the government’s prepared scheme, BBM subsidies will not be withdrawn for low-income communities. The policy focus is on protecting the poor while closing loopholes that allow economically capable groups to access subsidies.
“For subsidised BBM, we will maintain it for the poor and low-income people. We will maintain it for 80% of our people. But at the right time, the strong ones, the rich ones, if they want to use expensive petrol, they must pay market prices. Already rich, still asking for subsidies, no way. What we protect are the poor people,” Prabowo emphasised.
He stressed that the policy is temporary but essential as a momentum to improve the national energy consumption pattern, which has been deemed inefficient so far. The government, he said, must not be lulled by seemingly safe conditions.
“This is only a certain period. We must not become a nation that is too relaxed. Let us correct ourselves,” he said.
Prabowo also reminded that the globally tense situation must not be met with complacency. Instead, he views it as an opportunity to improve governance, reduce waste, and strengthen fiscal and energy discipline.
“This crisis, for me, is an opportunity. Difficulties, challenges, obstacles, hurdles are opportunities. Making us have to work better, have to work more efficiently, must not be wasteful, there must be no leaks, there must be no corruption,” he concluded.