Elpiji Arrangement Assessed By Cermat Sasar Subsidy Recipients

An officer carried a 3 kg LPG gas cylinder into the truck to be taken to the official base in Mataram, NTB, Tuesday (11/6/2024). (ANTARA/HO-Pertamina)

JAKARTA - The government is arranging sales of liquid petroleum gas (elpiji) or LPG 3 kilograms (kg) by increasing retail status to sub-baseline.

Researcher of The Reform Initiative (TRI), Unggul Heriqbaldi, assessed that the policy of making retailers sub-base is considered right on target because the state can carry out monitoring.

"The government's subsidized LPG distribution arrangement is a strategic step considering the increasing burden of energy subsidies," said the man who is also a lecturer at the Faculty of Economics at Airlangga University on Friday, February 21.

However, Unggul reminded that the price adjustment and improvement of the 3 kg LPG distribution system or melon gas were carefully designed. Because, he continued, reform efforts in these two areas need careful planning and measurable implementation so that the impact remains under control economically and socially.

According to him, the government must ensure that the adjustment mechanism does not cause turmoil that can exacerbate the purchasing power of vulnerable people.

"Therefore, the policy delivery process must be carried out in stages, transparently, and with a clear mitigation strategy so that the final goal of improving welfare is truly achieved," he said.

On the other hand, although subsidies aim to improve people's welfare, Unggul said, its effectiveness in reducing poverty still needs to be studied further.

The reason, said Unggul, is that citing the World Bank Estimation (2022) data, every 1 percent of GDP allocated for fuel subsidies is only able to reduce poverty by 1.2 percent.

"This is much lower than direct assistance which can reduce poverty by up to 6.4 percent. Therefore, ensuring target accuracy is the key so that the subsidy budget really has a significant impact on community groups who need it the most," he said.

Previously, Minister of Energy and Mineral Resources Bahlil Lahadalia said the government was drafting regulations so that the status of retailers could be changed to a base so that people could get the appropriate price when buying directly at the base. The policy was then refined again by changing the status of retailers to sub bases.

Bahlil announced that all 3 kg LPG retailers in Indonesia around 375 thousand will be raised to sub base status. This step aims to ensure that the distribution of subsidized LPG is right on target and prices remain affordable.