Jakarta – Energy policy observers believe that the government’s approach to regulating the distribution of 3-kilogram LPG cylinders based on National Identification Numbers (NIK) has not been able to ensure that subsidies reach their intended targets and close loopholes.
Director of the Centre for Public Policy (Puskepi) Sofyano Zakaria said on Monday, 5 January, that the use of NIK is more cosmetic than a structural solution. In his view, this policy has the potential to obscure the essence of subsidies as an instrument of support for vulnerable groups.
Sofyano highlighted the lack of clarity regarding who is entitled to receive subsidised 3-kilogram LPG cylinders. Is it all ID card holders, all households, or only certain groups with specific socio-economic criteria? “If the definition is unclear, then what will happen is simply a shift in the problem. It looks neat on the computer screen, but in reality, it is still unfair,” he said.
The use of NIK as the main indicator for subsidy distribution was also criticised by Sofyano, as it has no direct correlation with the economic conditions of the community. According to him, identity cards cannot be used as a measure of a person’s financial capacity. Using NIK as the basis for subsidy distribution risks creating the false impression that subsidies are being targeted appropriately.
System reform or digitisation?
According to Sofyano, identity-based registration practices have actually been implemented at the grassroots level for a long time, so this new policy does not bring about fundamental changes in determining who is eligible for subsidies.
He explained that buyers of 3-kilogram LPG cylinders are generally required to submit a photocopy of their identity card to the distribution point. The data is then recorded and reported to the agent and on to Pertamina as part of the distribution monitoring mechanism. With this system, he believes that the distribution of subsidised LPG is not entirely uncontrolled.
Sofyano believes that the NIK-based policy currently being promoted by the government is more accurately described as digital-based administrative reform. In his view, simply transferring records from manual to digital formats “cannot be called reform, but is merely a matter of administration.”
Risk of missing the target
He warned that without clear economic indicators, poor communities risk becoming further marginalised. Restricting quotas based on national identification numbers could make it difficult for vulnerable groups to access LPG, while those who are better off continue to enjoy subsidies simply because they have valid identity documents.
As a comparison, Sofyano believes that the government actually has a more relevant and easier-to-apply indicator, namely household electricity consumption. Households with subsidised electricity consumption, especially those with a maximum consumption of 900 VA, are considered to be more representative of the lower-middle economic class.
According to him, the use of electricity indicators has a number of advantages because the data is readily available, verified, and better reflects economic capacity than NIK. In addition, this approach is considered more consistent because it targets households that have already received state subsidies in other sectors. “The question is, why aren’t these indicators being used?” said Sofyano.
He emphasised that without the courage to revise the definition of beneficiaries, the NIK-based policy would only be a superficial solution that failed to address the main issue of the 3-kilogram LPG subsidy. (Hartatik)
Banner photo: Ivan Rivandy/shutterstock.com
