New 3 Kg LPG Policy Does Not Guarantee Decreased Subsidy Burden

JAKARTA - The government's policy to prohibit the sale of 3 kilograms of LPG (kg) at the retail level and can only be carried out at the official base registered at Pertamina starting February 1, 2024, does not guarantee that the government's LPG subsidy burden will definitely decrease.

"If the policy is intended so that the distribution of subsidized LPG is right on target, then it should be carried out by making strict regulations on who is entitled to subsidized LPG, not only diverting retailers to official subsidized LPG bases," said Director of the Center for Public Policy Studies (Puskepi) Sofyano Zakaria in Jakarta, quoted by Antara, Monday, February 3.

Sofyano assessed that the determination of users who are entitled to 3 kg LPG as regulated in Presidential Decree 104 of 2007 specifically for households and micro-enterprises, actually reads "gray".

Finally, at the lower level of distribution, namely bases and retailers, it is understood that any group household has the right to buy subsidized LPG.

On the other hand, continued Sofyano, the provisions for Presidential Decree 104 of 2007 concerning Micro Business Users who are allowed to use 3 kg LPG are more understood that medium-class businesses are also considered micro-enterprises.

"Therefore, the main thing that should be addressed by the government is to revise Presidential Decree 104 of 2007, especially regarding who users are entitled to and also supervise in the field," said this energy policy observer.

According to Sofyano, the main problem faced by the government regarding subsidized LPG is basically not a matter of distribution or distribution, nor is it related to retail prices. For the government, it is more about increasing the burden of 3 kg LPG subsidies and related to increasing quotas.

"It is difficult to say definitely in accordance with the legal provisions that 3 kg LPG is dominantly misappropriated or declared wrong in terms of regulations, assessed by ash as it has been so far. Therefore, I see that the appointment of retailers as the official base of LPG subsidies does not guarantee that the amount of LPG subsidies will definitely decrease because it is considered that the distribution can be right on target," said Sofyano.

In addition, said Sofyano, the appointment of retailers as the official base of LPG subsidies will not necessarily attract the attention of retailers to turn into LPG bases. Because, with their retail status as retailers, they can actually get higher margins than as LPG's official base.

"Meanwhile, for the community, it is more dominant to come to the base to buy LPG. They are more comfortable to pay more for retailers but get services until their stove can turn on," he said.

Even so, Sofyano assessed that the transfer of retail status to a subsidized LPG base must be fully supported so that the amount of subsidies can be reduced.

"Hopefully the appointment of retailers as bases will not even increase the subsidy budget because no one can guarantee that the base will distribute 3 kg LPG to the right party because they also do not understand who is entitled to the subsidized LPG," he said.

Previously, Deputy Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung said that as of February 1, 2025, LPG (Liquefied Petroleum Gas) gas retailers subsidized 3 kilograms were required to register to become LPG bases of 3 kg Pertamina.

"The retailer, we will use it as a base, as of February 1," said Yuliot, Friday, January 31.