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 fishery 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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How does the new fuel subsidy scheme in Indonesia aim to address the issues of the existing system?
## New Fuel Subsidy Scheme in Indonesia: An Interview
**Host:** Welcome back to the show. Today we’re talking about the new fuel subsidy scheme being implemented in Indonesia. To help us understand the details, we have Dr. Dewi Lestari, an expert in economic policy.
**Dr. Lestari:** Thank you for having me.
**Host:** Dr. Lestari, can you tell us why the government decided to overhaul the existing fuel subsidy system?
**Dr. Lestari:** Certainly. The current system has faced criticism due to its lack of targeting. Many individuals who didn’t necessarily need the assistance benefited, leading to wastage and inefficiencies. This new scheme aims to address those issues by focusing on specific groups who truly rely on subsidized fuel.
**Host:** The article mentions five key beneficiary categories. Could you elaborate on those?
**Dr. Lestari:** Absolutely. First, poor and vulnerable communities registered under the Integrated Social Welfare Data (DTKS). This ensures direct support reaches those most in need.
Next, Micro, Small and Medium Enterprises (MSMEs), a vital sector vulnerable to fuel price fluctuations. The subsidy aims to shield them from excessive costs and ensure their continuity.
Public transportation is also a major focus. By lowering their fuel expenses, the government hopes to make public transport more affordable for all.
Then we have farmers and fishermen who rely on fuel for their operations.
Subsidies here will contribute to food security and uplift their livelihoods.
specific industries deemed essential for the national economy, like those involved in food security and basic commodity production, will also receive support.
**Host:** This sounds like a more targeted and sustainable approach. What measures will be taken to ensure the subsidies reach the intended recipients efficiently?
**Dr. Lestari:** The government recognizes the importance of transparency and accurate delivery. The plan is to leverage technology by using platforms and databases to verify eligibility and track subsidy distribution. This will minimize leakage and maximize the impact of the programme.
**Host:** Exciting times ahead for Indonesia with these changes. Dr. Lestari, thank you for taking the time to shed light on this important development.
**Dr. Lestari:** The pleasure was all mine.
