Prabowo Changes The Fuel Subsidy Scheme To BLT, Observers Suggest This

Illustration (Photo: Doc Antara)

JAKARTA - Energy Policy Analyst International Institute for Sustainable Development (IISD) Anissa Suharsono supports President Prabowo Subianto's plan to convert the fuel oil subsidy (BBM) scheme into Direct Cash Assistance (BLT) to make it more targeted.

Anissa also advised Prabowo to carry out subsidy reforms by distributing the subsidies directly to the recipients.

"I would like to recommend subsidized reform with the implementation of direct targets per subsidy. So, the subsidy is immediately channeled to people who really need it," said Anissa, quoted Monday, October 28.

Not only that, Annisa also suggested that there be improvements to the mechanism for the distribution and improvement of the digitization system.

This is intended so that the change in the scheme can ensure that the distribution of subsidies is more targeted.

Anissa said that the change in the scheme must also be supported by accurate population data verification.

"So it must change the subsidy scheme from subsidizing its commodities to subsidies directly to its recipients. Then, there is an improvement in the mechanism for determining energy prices that is more flexible and reflects market value," explained Anissa.

Although it did not immediately have a positive impact on the distribution that was more targeted, Anissa said the change in this scheme would have an impact on the efficiency of the state budget.

"Now the money is directly transferred to the really vulnerable household, so it can no longer be bought freely. It will not be completely efficient for fuel subsidies and it is impossible to immediately be analyzed. But that is the first step is a direct transfer scheme, it will help in efficiency," he said.