Up Again! Energy Subsidy Budgeted IDR 204.5 Trillion

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Finance has budgeted IDR 204.5 trillion for Energy subsidies by 2025. This number has been observed to have increased from the outlook in 2024 which is estimated to reach IDR 192.8 trillion.

Minister of Finance Sri Mulyani revealed that the budget consisted of subsidies for certain types of fuel (JBT) and 3 kg LPG of cylinders of IDR 114 trillion. This number also increased from 2024 tang, which was set at IDR 112 trillion. Meanwhile, electricity subsidies are set at IDR 90.2 trillion.

Quoted from Book II of the Financial Note, it is stated that in the RAPBN for the 2025 fiscal year, 3 kg LPG subsidy and commodity-based household electricity subsidies are still allocated.

It was also stated that the policy of transforming energy subsidies into subsidies based on people or beneficiaries would be carried out in stages by taking into account data readiness, infrastructure, and economic and social conditions of the community.

Then the budget for certain fuel subsidies (JBT) and 3 kg LPG cylinders in the 2025 budget year RAPBN is planned at IDR 114 trillion or 2.0 percent higher when compared to the outlook for the 2024 fiscal year of IDR 112 trillion.

The Budget for Certain Fuel Type Subsidies and 3 kg LPG cylinders in the 2025 fiscal year is directed to continue providing fixed subsidies for diesel oil and subsidies (price difference) for kerosene and 3 Kg LPG Tubes; continue the policy of targeted fuel subsidies and continue efforts to transform 3 kg LPG cylinder LPG subsidies into beneficiaries based and integrated with accurate beneficiary data.

Then the calculation of the budget for certain fuel type subsidies and 3 kg LPG cylinders for the 2025 fiscal year uses assumptions and parameters, including the rupiah exchange rate against the US and ICP dollars; fixed subsidies for diesel oil amounting to Rp1,000 per liter; solar fuel volume of 18,885 thousand kiloliters (KL) and kerosene of 525,000 kiloliters; and 3 kg LPG volume of tubes of 8,170 million kg.

Meanwhile, for electricity subsidies, the increase in subsidy allocation is mainly influenced by an increase in the cost of providing electricity (BPP) and an increase in subsidized electricity volume. The increase in BPP was caused, among others, by: First, the weakening of the rupiah exchange rate against the US dollar. Second, increasing the use of biomass fuel for PLTU co-firing. Third, the increase in fuel energy in order to increase the reliability of electricity supply, especially in the Disadvantaged, Outermost and Outermost (3T) areas.