Economists Estimates 2024 Energy Subsidy Budget To Soar Up To IDR 220 Trillion

JAKARTA - Bank Permata economist Josua Pardede estimates that the energy subsidy budget in 2024 will range from Rp200 trillion to Rp220 trillion. This figure has increased when compared to 2023 which amounted to Rp164.29 trillion.

"The energy subsidy budget in 2024 is estimated to range from Rp200 trillion to Rp220 trillion," he explained to VOI, Friday, June 28.

Josua conveyed that the estimated subsidy budget in 2024 is much higher when compared to the realization of energy subsidy spending in 2023 which amounted to Rp164.29 trillion which includes subsidies for fuel, LPG 3 kg and electricity.

"The realization of the Energy Subsidy payment is for the distribution of subsidized fuel at 16,504.53 thousand KL, LPG Tabung 3 Kg 7.73 million MT, subsidized electricity customers at 39.96 million customers, and subsidized electricity consumption volume at 64.46 TWh," he said.

According to Josua, the estimated subsidy budget in 2024, which will range from Rp200 trillion to Rp220 trillion, also considers increasing the volume of subsidized energy distribution, the development of the 2024 state budget macro assumption.

In addition, Josua gave an example, such as the rupiah exchange rate which currently has a deviation of around Rp.891 per US dollar from the assumption of Rp. 15,000 per US dollar even though the assumption that the price of Indonesian Crude Price (ICP) still tends to be inlined assuming 82 US dollars per barrel.

For information, based on data from the Ministry of Finance (Kemenkeu), the realization of energy subsidy spending until May 2024 reached Rp56.9 trillion, an increase compared to the May 2023 position which was recorded at Rp54.24 trillion.

Meanwhile, the realization of the energy subsidy until May 2024 consists of fuel oil (BBM) reaching 5.57 million kiloliters, or a decrease of 1 percent when compared to the same period last year of 5.63 million kilo liters.

Then, for 3 kg LPG subsidy expenditure, the realization reached 2.7 million metric tons or grew 1.9 percent from the same period last year of 2.6 million metric tons. Meanwhile, electricity subsidies reached 40.4 million subscribers, an increase of 3.1 percent from the same period last year of 39.2 million subscribers.

Meanwhile, the subsidy expenditure is mostly influenced by the development of macro assumptions such as crude oil prices and exchange rates, and the volume of subsidized goods distribution.