DPR And Government Agree To Cut The Budget For The Prabowo-Gibran Government's Energy Subsidy Budget

Minister of Finance Sri Mulyani (Photo; Doc. Antara)

JAKARTA - The Budget Agency of the House of Representatives (Banggar DPR) and the Government agreed to reduce the energy subsidy budget in the 2025 State Budget Draft (RAPBN) from IDR 204.5 trillion to IDR 203.4 trillion in the provisional posture of the State Budget Bill for Fiscal Year 2025.

Finance Minister Sri Mulyani Indrawati said that she would cut the 2025 energy subsidy budget of IDR 1.1 trillion to IDR 203.4 trillion.

Sri Mulyani explained that the reduction in the 2025 energy subsidy budget was due to the assumption that the rupiah exchange rate against the US dollar was one of the components that affected the import expenditure of oil and gas using the US dollar as a means of payment.

According to Sri Mulyani, import transactions are carried out with US dollars, so that if the exchange rate is low, the subsidy budget issued will be smaller and vice versa, if the dollar is high, the rupiah exchange rate will weaken, so that the energy subsidy budget can increase.

"Subsidi changed to follow the rupiah exchange rate in the Panja agreement, from Rp. 16,100 to Rp. 16,000 (per US dollar)," Sri Mulyani said at a Banggar meeting, Wednesday, September 4.

Sri Mulyani explained that in her presentation, the total budget for certain fuel oil subsidies (BBM) and liquid petroleum gas (LPG) of 3 kilograms was IDR 113.7 trillion from the previous IDR 114.7 trillion.

As for the details, the 2025 fuel subsidy budget is IDR 26.7 trillion, the 2025 LPG subsidy budget is IDR 87.0 trillion, and the 2025 electricity subsidy budget is IDR 89.7 trillion.

"There is a decrease in energy subsidy spending of IDR 1.1 trillion from the 2025 RAPBN, used for additional fuel and electricity compensation," he said.