Measures
Indonesia needs to reform the fossil fuel subsidy program
- NEXSTEP analysis considers both the consumer side energy subsidies and generation side financial support and tax incentives to calculate an annual fiscal cost of 7.129 Billion USD in fossil fuel subsidies by the Government of Indonesia.
- Indonesia plans to provide energy subsidies only to poor and vulnerable households through LPG, kerosene and electricity subsidy. However in 2017, only 13 million poor and vulnerable households received subsidized 3-kg LPG cylinders compared to 19.8 rich household beneficiaries.
- This indicates that the LPG subsidy program is poorly targeted, with an annual fiscal cost of 2.91 Billion USD to the Government of Indonesia.
Category
Group