THE Indonesian government is currently designing and implementing a new scheme for fuel oil (BBM) subsidies to ensure that this assistance is more targeted and reduces waste that has occurred so far.
In this new scheme, fuel subsidies will no longer be given evenly, but will be more focused on certain groups of people and sectors that really need them.
The new fuel subsidy scheme aims to ease the burden on low-income communities and optimize the use of subsidy funds for productive sectors.
This step was taken because previously it was felt that fuel subsidies were not on target and there was potential for abuse by groups who did not need the assistance.
Therefore, the government through the Ministry of Energy and Mineral Resources (ESDM) and the Ministry of Social Affairs (Kemensos) is introducing a more measurable mechanism.
The following are several categories of fuel subsidy recipients based on the new scheme that will be implemented:
1. Poor and Vulnerable Communities
The government will prioritize providing fuel subsidies to the people registered in Integrated Social Welfare Data (DTKS). This group consists of poor families who have low incomes and are vulnerable to poverty. Distribution of subsidies to them is expected to help them reduce their burden of expenses, especially in transportation and household energy costs.
2. Micro, Small and Medium Enterprises (MSME) Group
MSMEs are a sector that is very vulnerable to fluctuations in energy prices, especially fuel. Therefore, this business group will receive more attention in the new subsidy scheme. The government hopes that by providing subsidies to MSMEs, small businesses can maintain the continuity of their businesses without having to be burdened with high energy costs.
3. Public Transportation
Public transportation such as buses, public transportation and motorbike taxis are often people’s mainstay in daily mobility. With more focused fuel subsidies, it is hoped that public transportation costs will be more affordable. This will certainly have a positive impact on people who depend on public transportation for their activities.
4. Farmers and Fishermen
Farmer and fisherman groups who need fuel for agricultural and fisheries operations will also be the main recipients of this subsidy. Many farmers use fuel to operate agricultural machinery, while fishermen need fuel for boats and fishing gear. With subsidies, it is hoped that agricultural and fishery products will be more affordable and improve the welfare of farmers and fishermen.
5. Specific Industries
Certain industrial sectors, such as those involved in food security, production of basic commodities, and other sectors that support people’s basic needs, will also receive fuel subsidies. The government considers these sectors to be very important for the continuity of the national economy, so that the subsidies provided can increase competitiveness and reduce production costs.
Use of Technology for Distribution of Subsidies
The government also plans to use technology to optimize the distribution of fuel subsidies. One of the proposed mechanisms is to use special applications and cards that make it easier to monitor subsidy recipients.
Through this system, the government can more easily verify who is entitled to receive subsidies and avoid potential abuse that has often occurred in the past.
In addition, quota restrictions for each type of fuel will also be implemented to ensure that only those who are entitled to subsidies receive them. In this way, it is hoped that there will be no more misuse or waste of subsidies that are not well targeted.
The implementation of the new fuel subsidy scheme certainly faces challenges, especially in terms of verifying accurate recipient data and transparency in distribution.
However, if implemented well, this scheme is expected to increase the efficiency of using the subsidy budget and provide greater benefits for people in need.
The government hopes that with well-targeted subsidies, sectors that depend on fuel can continue to run at more affordable costs, while poor people will no longer be burdened by ever-increasing fuel prices. (Z-10)
Source:
- Ministry of Energy and Mineral Resources (ESDM). (2024). New Fuel Subsidy Scheme and Its Distribution. Jakarta: Ministry of Energy and Mineral Resources.
- Ministry of Social Affairs (Kemensos). (2024). Integrated Social Welfare Data (DTKS). Jakarta: Ministry of Social Affairs.
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What are some potential challenges the Indonesian government might face in implementing this new targeted fuel subsidy scheme? [[1](https://www.reuters.com/business/energy/indonesia-conducting-thorough-exercise-reform-fuel-subsidy-scheme-minister-says-2024-11-04/)]
## Interview on Indonesia’s New Targeted Fuel Subsidy Scheme
**(Intro Music)**
**Host:** Welcome back to the show, and today we’re discussing the Indonesian government’s new fuel subsidy scheme. Joining me to shed light on this important development is [Guest Name], an expert on Indonesian energy policy. Welcome, [Guest Name]!
**Guest:** Thank you for having me.
**Host:** So, [Guest Name], can you give us a rundown of what this new scheme entails?
**Guest:** Of course. The Indonesian government is moving away from a blanket approach to fuel subsidies, recognizing that this led to inefficiencies and potential abuse. The new system will be much more targeted, aiming to reach those who truly need assistance.
**Host:** Who specifically will benefit from these targeted subsidies?
**Guest:** The government has identified five main categories. Firstly, low-income families registered in the Integrated Social Welfare Data (DTKS) will be prioritized. Then there’s the crucial Micro, Small, and Medium Enterprises (MSME) sector, which is often vulnerable to fuel price fluctuations. Public transportation, farmers, fishermen, and certain essential industries will also be key beneficiaries.
**Host:** That sounds like a fairly comprehensive approach. What are the main goals of this shift in subsidy policy?
**Guest:** The primary goal is to ensure that fuel subsidies reach those who need them most, easing their financial burden. By targeting specific groups, the government aims to optimize the use of subsidy funds and prevent waste. This will also help to stabilize fuel prices for essential sectors, ultimately contributing to economic stability.
**Host:** Interesting. I understand technology will play a role in this new system. Can you tell us more about that?
**Guest:** Yes, the government is planning to leverage technology for more efficient subsidy distribution.
[Continue the interview based on information provided in the article, exploring the role of technology, potential challenges, and implications for Indonesia’s economy and society].
**(Outro Music)**
