Jakarta. The government recently revealed that a portion of the government’s energy subsidies had gone to the rich instead of the poor.

The misallocated subsidies are worth approximately Rp 100 trillion (approximately $6.3 billion), according to Energy Minister Bahlil Lahadalia. 

The government has allocated Rp 435 trillion in the state budget for energy subsidies throughout 2024 to make sure that fuel and electricity prices are affordable to the people in need. But data showed that the wealthier communities had been unrightfully enjoying the subsidized fuel and electricity, Bahlil said over the weekend. Bahlil was referring to the reports collected from the state electric utility company PLN and the state-owned oil and gas firm Pertamina. The minister also based the assumptions on the data from the country’s downstream oil and gas regulator BPH Migas.

“We suspect about 20-30 percent of the fuel and electricity subsidies are not going to the people who deserve them. And these misallocated subsidies are worth Rp 100 trillion, more or less,” Bahlil told reporters, shortly after a meeting with economic affairs-related ministers in Jakarta.

“We don’t want people who are already comfortably off to get these subsidies. The subsidies should have helped our brothers and sisters in need,” the minister said.

According to Bahlil, the government will try to find solutions so the subsidies go to poorer households as they should, including by directly giving cash aid to the targeted beneficiaries. The government is also mulling combining the existing subsidy scheme with direct cash assistance. 

President Prabowo Subianto has instructed Bahlil to form a team dedicated to improving the energy subsidy distribution. Bahlil said: “Let’s just see. Mr. President has given us two weeks for us to coming up with the solutions.”

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