2021-2023 Energy subsidies

The global energy crisis induced a sharp rise in the amounts dedicated by the Indonesian government to consumer subsidies and compensations for electricity, fuels and liquefied petroleum gas. 

The related government budget saw a 39% rise for the year 2021, reaching IDR 243 trillion. In 2022, the soaring cost of this measure led policymakers to redirect the fuel support component to low-income consumers, with: 

• IDR 9.6 trillion towards 14.6 million workers with wages under IDR 3.5 million. 
• IDR 12.4 trillion for cash assistance for petroleum fuel to 20.65 million households. Each household received IDR 150k. 
• IDR 2.17 trillion for public transport assistance, online bike taxi assistance and fishermen. 

The subsidies were also revised downward in September 2022, but the support was sustained in the 2023 budget. Fiscal pressures brought by the global energy crisis also led the government to suspend in 2022 the conversion programme of 3-kilogram LPG stoves to electric ones.

In 2023, the Government through Ministry of Finance continued earmarked IDR 211 trillion for fuel, LPG and electricity to cushion the volatility of commodity prices, but did not extend the direct cash assistance towards low-income households. 

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