Jakarta – Energy and Mineral Resources Minister Bahlil Lahadalia stated that the government is preparing a “one price” policy for 3kg LPG throughout Indonesia, aimed at ensuring fairness and reducing subsidy leakage, an ongoing problem.
In a statement on Wednesday, July 2, Bahlil said that the changes would be outlined in a revision of Presidential Regulation (Perpres) No. 104/2007 on the Supply, Distribution, and Pricing of 3-kilogram LPG Canisters. This step, according to Bahlil, is part of an effort to revamp the entire subsidised LPG distribution system.
“The price that has been given to the regions, there is a possibility that later in the discussion, in the Presidential Regulation, we will just determine one price so that there is no additional movement below,” he said.
The price of subsidised LPG in 3-kg canisters in various regions still varies because it is influenced by the additional cost components set by local governments. This is considered to trigger inequality and open loopholes for distribution irregularities at the lower level.
In addition to price equalisation, the government is also reviewing several new methods of LPG distribution to ensure that subsidies reach the intended beneficiaries, namely the poor and vulnerable, who are the primary targets. “We are discussing the Perpres for LPG. We will change several methods so that this leakage does not occur,” Bahlil said.
According to data from the Ministry of Energy and Mineral Resources, the annual subsidy budget for subsidised LPG reaches a substantial figure, between Rp 80 trillion and Rp 87 trillion. This figure illustrates the importance of monitoring and distributing subsidies in a targeted manner.
“This is because the state spends a lot of money, Rp 80-87 trillion per year, on subsidies. If the price is raised, and it continues to be raised, the state’s expectations and what happens are not in sync,” Bahlil explained.
The one-price policy for 3kg LPG is designed to be similar to the one-price fuel approach implemented in remote areas. Thus, people in remote areas will no longer be burdened by high prices due to the high costs of distribution.
Nevertheless, the government has not confirmed when the revised regulation will be finalised and implemented. The process of harmonisation between agencies and trials of the new distribution scheme will still be carried out to ensure the effectiveness of the policy. (Hartatik)
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