Indonesia Cuts 2027 Energy Subsidies by $635 Million
Indonesia is cutting its 2027 energy subsidy budget by $635 million, citing improved data accuracy for subsidy distribution. The government aims to ensure that fuel and LPG assistance reaches the most eligible households while maintaining electricity subsidies.
Why it matters
This move demonstrates a fiscal strategy to reduce government spending through administrative efficiency rather than broad-based austerity, impacting energy market dynamics in Southeast Asia.
September 29, 2026 | 7:13 pm SHARE URL berhasil di salin. A man carries two subsidized 3-kg LPG canisters in undated photo. (Antara Photo) Jakarta. Indonesia will cut its energy subsidy budget for 2027 by Rp 11.4 trillion ($635.10 million) to Rp 261.5 trillion, citing improvements to recipient data aimed at ensuring assistance reaches households that need it most.
The agreed allocation is lower than the Rp 272.94 trillion initially proposed in the 2027 State Budget (APBN) financial note and draft budget (RAPBN), House of Representatives Budget Committee chairman Said Abdullah told reporters during a plenary session at the House complex in Jakarta on Tuesday.
Said explained that the reduction in energy subsidies would not undermine the government's commitment to public welfare, as better recipient data would help improve targeting and make spending more efficient.
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