Gov't, House agree on Rp261.5 trillion energy subsidy for 2027 - ANTARA News Jawa Timur

Jakarta (ANTARA) - The government and the House of Representatives (DPR) have agreed to allocate Rp261.5 trillion (around US$16.4 billion) for energy subsidies under the 2027 State Budget Law, down Rp11.44 trillion from the previous allocation of Rp272.94 trillion.

The reduction mainly comes from subsidies for fuel and 3-kilogram LPG cylinders, set at Rp131.39 trillion, down from Rp143.84 trillion previously.

"We need to explain to this honorable assembly that our agreement to reduce several subsidy budgets, such as for kerosene, diesel, and 3-kilogram LPG, does not mean our attention to the poor has diminished," Chairman of the House Budget Committee Said Abdullah said here on Tuesday.

Meanwhile, the electricity subsidy remained unchanged at Rp130.11 trillion, bringing the total energy subsidies in the 2027 State Budget to Rp261.5 trillion.

In terms of volume, the government and the House agreed on a subsidized fuel volume of 19.56 million kiloliters, down from 20.09 million kiloliters previously.

That volume consists of kerosene at 561,000 kiloliters, up from 539,000 kiloliters previously, and diesel at 19 million kiloliters, down from 19.56 million kiloliters previously.

Meanwhile, the volume of 3-kilogram LPG canisters was set at 8 million metric tons, down from 8.95 million metric tons previously. The fixed subsidy rate for diesel fuel was set at Rp1,000 per liter.

Abdullah explained that the subsidy budget cut was accompanied by improvements to subsidy recipient data to ensure more accurate targeting and more efficient use of the energy subsidy budget.

"This reduction in subsidies is accompanied by improvements to recipient data, so it will make subsidy distribution more targeted and make our energy subsidy budget more efficient. With more accurate recipient data, this step will correct errors in subsidy recipients that have persisted for years," Abdullah said.

He said that so far, people in the lower deciles have actually received fewer benefits from the implementation of energy subsidies.

"Therefore, the government will continue to improve the National Single Socioeconomic Data (DTSEN), which serves as the basis for determining subsidy recipients," he said.

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