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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– What are the key drivers behind Indonesia’s shift from broad-based to targeted fuel subsidies?
## Indonesia Revamps Fuel Subsidy Program for Targeted Support
**Interviewer:** Welcome back to the show. Today, we’re discussing Indonesia’s new fuel subsidy program, a significant shift in how the government aims to support its citizens. Joining us is [Guest Name], an expert in economic policy. Welcome to the program.
**Guest:** Thank you for having me.
**Interviewer:** Let’s dive right in. Indonesia has historically provided fuel subsidies across the board. What prompted this move towards a more targeted approach?
**Guest:** There were several key drivers. Firstly, the broad-based subsidies were found to be inefficient, with a significant portion benefiting those who didn’t necessarily need the assistance. This included wealthier individuals and businesses, leading to wasted resources. Secondly, the government recognized the need to directly support vulnerable communities and critical industries. This new scheme aims to do just that by prioritizing those who truly rely on fuel subsidies for their livelihoods and well-being.
**Interviewer:** Can you elaborate on the specific groups who will benefit from this targeted approach?
**Guest:** Absolutely. The new program will focus on five key groups:
1. **Low-income families:** Those registered in the Integrated Social Welfare Data (DTKS) will receive priority, ensuring that the most vulnerable are protected from rising fuel costs.
2. **Micro, Small, and Medium Enterprises (MSMEs):** Recognizing their crucial role in the economy, MSMEs will see dedicated support to shield them from fluctuating fuel prices, enabling them to continue operations.
3. **Public Transportation:** By subsidizing fuel for buses, public transportation, and motorbike taxis, the government aims to make transportation more affordable for the working class who heavily rely on these services.
4. **Farmers and Fishermen:** These vital sectors, heavily reliant on fuel for agricultural and fishing operations, will receive targeted subsidies to keep food prices stable and support their livelihood.
5. **Specific Industries:** Industries critical for food security, basic commodity production, and other essential services will be supported to maintain national economic stability.
**Interviewer:** This certainly sounds like a much more equitable system. What about implementation? How will the government ensure efficient and transparent distribution of these subsidies?
**Guest:** That’s a crucial question. The government has emphasized the use of technology to streamline the process and prevent misuse. This includes digital platforms for registration, verification, and distribution.
**Interviewer:** Thank you for shedding light on this important development. I’m sure our viewers are eager to see how this new fuel subsidy program plays out in Indonesia.
**Guest:** It’s certainly an evolving situation, but the government’s commitment to a more targeted and efficient approach is encouraging.
**Interviewer:** We appreciate your time and insights.
