Prabowo Plans Major Cuts to Fuel Subsidies

President Prabowo Subianto has affirmed the government will significantly reduce fuel oil (BBM) subsidies. The policy is part of an effort to reduce BBM consumption while also curbing dependence on imported fuel. “BBM subsidies must be reduced significantly,” Prabowo stated during the 1st Plenary Session of the 2026–2027 Session Period, with the agenda of delivering the 2027 State Budget Draft and Financial Note at the DPR RI, Friday (14/8). To support this policy, the government has launched a national electric motorcycle ecosystem as a more energy-efficient vehicle alternative. This move is expected to encourage the public to switch from fuel-powered vehicles. The government is also preparing incentives for one million electric motorcycles produced domestically. These incentives are aimed at accelerating the use of electric vehicles while strengthening the national industry. “We will provide incentives for one million electric motorcycles produced domestically by Indonesian entrepreneurs,” Prabowo said. According to Prabowo, the electric motorcycle incentive policy has three main objectives. First, to lower vehicle costs for the public. Second, to reduce imported fuel consumption. Third, to expand the national electric motorcycle industry. The development of this industry encompasses not only vehicle production but also strengthening the supply chain for batteries, components, software, and after-sales services. Thus, this policy is expected to create a more complete industrial ecosystem within the country. The head of state considers the provision of incentives as a form of investment so that the Indonesian people become the primary market for products developed by the national industry. This policy is also expected to open greater opportunities for domestic business actors and the workforce. “Every Indonesian-made electric motorcycle travelling on the highway represents three victories at once: savings for families, a reduction in energy imports, and jobs for the nation’s children,” Prabowo said.