BPP Increases, Electricity Subsidy In 2026 Is Planned To Be IDR 104.6 Trillion

Electricity (Photo: dock. Antara)

JAKARTA - The government plans an electricity subsidy budget in 2026 of IDR 104.6 trillion or 17.5 percent higher than the outlook for 2025 of IDR 89.07 trillion.

Quoted in Book II of the Financial Note and the RAPBN for the 2026 budget year, it is stated that this allocation increase is mainly influenced by an increase in the cost of electricity (BPP) production and an increase in subsidized electricity volume.

The increase in BPP was partly due to an increase in the rupiah exchange rate against the dollar. Just so you know, taking into account the turmoil that occurred in the United States (US) in determining the rupiah exchange rate of Rp. 16,500 in the 2026 State Revenue and Expenditure Budget Draft (RAPBN).

Second, the government is also considering increasing the use of biomass fuel for cofiring in Steam Power Plants (PLTU), and increasing the energy mix of fuel oil (BBM) in order to increase the reliability of electricity supply, especially in the Disadvantaged, Frontier, Outermost (3T) areas.

The direction of the electricity subsidy policy for the 2026 fiscal year, among others, for electricity subsidies for households, is given to poor and vulnerable households in accordance with the National Socio-Economic Single Data (DTSEN) accompanied by tariff adjustments or tariff adjustments for subsidy customers. This policy is carried out as an effort to increase the right target so that subsidies are given to households that are entitled and encourage more efficient and fair energy transitions taking into account economic, social, fiscal and environmental aspects.

"The government has committed to reducing the impact of emissions through the implementation of the use of clean and curvature-friendly energy," reads Book II of the Financial Note and RAPBN 2026, quoted Tuesday, August 19.