Direction of Fuel Subsidies and Energy Transition Trend

Globally, there are at least three big themes related to energy subsidies and climate change, which are Sustainable Development Goals (SDGs), energy transition and decarbonization.

The energy subsidies spent by the government keep increasing annually. In the period of 2017-2022, fuel and liquefied natural gas (LPG) subsidies went beyond Rp 100 trillion (US$6.81 billion) per year. For 2022, the government has set the budget of energy subsidies for fuel, LPG and electricity at Rp 134 trillion, or 7.2 percent of the 2002 state budget (APBN).