Jakarta. Energy and Mineral Resources Minister Bahlil Lahadalia on Tuesday outlined several problems in the distribution of subsidized 3-kilogram liquefied petroleum gas (LPG), which have led to price hikes despite the government's massive Rp 87 trillion ($5.3 billion) annual subsidy.

Bahlil said new measures are being implemented to ensure the subsidy reaches its intended low-income beneficiaries.

The government has set the ideal retail price for a 3-kg LPG canister at Rp 19,000 ($1.16). However, in practice, many retailers sell it for Rp 25,000 to Rp 30,000, while in some provinces, prices have surged even higher.

Beyond pricing issues, Bahlil pointed out another critical problem: subsidized LPG is being misused for industrial purposes, diverting it from the households it is meant to support.

Retailer-Level Distribution Problems
According to Bahlil, the most significant flaws in the distribution system occur at the retailer level. While Pertamina can monitor shipments to authorized distributors and agents through a tracking application, oversight becomes difficult when LPG reaches small retailers.

"Most of the errors happen there," Bahlil said.

To address these problems, President Prabowo Subianto has ordered a revamp of the distribution system, including upgrading retailer status to authorized agents. This change would allow Pertamina to regulate prices at the retailer level, ensuring fair pricing and targeted distribution.

Bahlil clarified that the recent ban on retailers selling 3-kg LPG was not a directive from President Prabowo but was based on a study conducted since 2023.

"This issue has been under review since last year. Audits revealed instances of misuse by some retailers. But rather than pointing fingers, our ministry is focused on fixing the problem," he explained.

ID Card
President Prabowo has made it clear that the subsidized LPG must remain accessible to the public while preventing abuse. The requirement to purchase 3-kg LPG using an ID card remains in place to track buyers and prevent illegal resales.

"If we don’t use ID verification, how do we ensure that the LPG isn’t being diverted to industries? What happens to our subsidy then?" Bahlil stressed.

He reiterated that the policy’s goal is to ensure affordable access to LPG while maintaining the integrity of the government’s subsidy program.

Retailer Registration and Ongoing Complaints
Since February 1, the Energy and Mineral Resources Ministry has restricted the sale of 3-kg LPG to authorized agents only. Deputy Minister Yuliot Tanjung said the government is now encouraging retailers to register as authorized distributors under Pertamina.

Retailers must apply online through the Online Single Submission (OSS) system and obtain a Business Identification Number (NIB) before officially partnering with Pertamina. The goal of this policy is to standardize pricing, streamline distribution, and ensure equal access to 3-kg LPG across all regions.

However, the new system has triggered widespread complaints about shortages.

In Jakarta, residents of Pasar Manggis Village, Setiabudi District, have reported difficulties obtaining 3-kg LPG over the past week.

In East Kalimantan, social media users have expressed frustration over limited availability and skyrocketing prices, with some areas seeing prices soar to Rp 50,000 per canister -- more than double the subsidized price of Rp 19,000.

Despite these concerns, Bahlil denied that there are actual shortages, attributing the difficulties to adjustments in the distribution system.