YLKI Chairman Says Converting LPG To Induction Stoves Can Save Subsidies

Daily Chairperson of the Indonesian Consumers Foundation, Tulus Abadi. (Photo: ANTARA)

JAKARTA - The Indonesian Consumers Foundation (YLKI) has asked the government to immediately divert the subsidies that have been injected into the 3-kilogram (kg) LPG to another sector that is more targeted, namely electricity.

For this reason, YLKI supports the government's policy to divert or convert the use of 3 kg LPG to induction stoves so that fuel subsidies are more targeted.

"There are many deviations from the 3 kg LPG subsidy. According to World Bank data, about 30 percent of users of 3 kg LPG gas are the affluent group," said YLKI Daily Chair Tulus Abadi in a written statement in Jakarta, Friday, July 22.

Meanwhile, the electricity subsidy targeting people with 450 Volt Ampere (VA) and 900 VA electricity groups, he continued, has so far been in line with the government's target, which is targeting the lower class.

People with these two electricity groups are a group that deserves to receive subsidies and are included in the Social Welfare Integrated Data (DTKS) of the Ministry of Social Affairs (Kemensos).

Subsidies on electricity also cannot be transferred because the electricity class cannot be manipulated and the electricity meter is attached to every house (by name by the customer's NIK) and cannot be traded arbitrarily.

Meanwhile, the open system subsidy for 3 kg LPG has enormous potential to be enjoyed by the well-to-do because anyone can buy it.

"So it will be fairer and more effective if energy subsidies via 3 kg LPG are converted into electricity subsidies, via induction stoves. It is fairer from a socio-economic perspective. There is no wrong target," said Tulus.

Data from the Ministry of Finance (Kemenkeu) noted that the realization of subsidized fuel oil (BBM) and 3 kg LPG increased by an average of 26.58 percent annually during the period 2017 to 2021.

The increase in the value of the subsidy was influenced by fluctuations in the ICP price and the rupiah exchange rate.

Meanwhile, the realization of the 3 kg LPG subsidy in 2021 will reach Rp. 67.62 trillion, including the underpayment of Rp. 3.72 trillion.

On the other hand, the outlook for subsidies for fuel and 3 kg LPG in 2022 is estimated to reach Rp. 149.37 trillion or 192.61 percent of the 2022 state budget (APBN) posture.

According to the Ministry of Finance, more than 90 percent of the increase in the value of the subsidy came from the allocation of 3 kg LPG which was caused by the gap between the retail selling price (HJE) and the economic price that continued to widen driven by world crude oil prices.

The burden of the 3 kg LPG subsidy is also getting wider due to fluctuations in world crude oil prices until the middle of this year.

The economic price of the subsidized melon gas is already Rp. 15,359 per kilogram from the retail selling price (HJE) which is set at Rp. 4,250 per kilogram this year.

According to Tulus, the transfer of subsidized 3 kg LPG can be an incentive for people to switch from gas stoves to more environmentally friendly energy, namely electric stoves.

One of them is by providing induction cooker packages (stove, utensil, power adjustment, and installation) which are provided free of charge to the public.

The move, he added, was a smart solution. Because in addition to reducing the burden of subsidies in the State Revenue and Expenditure Budget (APBN) and channeling subsidies on target, the use of induction cookers will also make people more efficient in their monthly expenditures.

"There must be strong regulations and incentives or subsidies for the conversion of 3 kg LPG gas into an induction cooker, as before the conversion from kerosene to LPG. Conversion to an induction cooker can reduce LPG imports," he concluded.