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Indonesia sets 5.1% higher fuel, LPG and electricity subsidy in 2018

JAKARTA ( – The government and the State Budget Commission of the House of Representative (DPR) have agreed to set subsidy for fuel, LPG and electricity in the 2018 State Budget at Rp94.55 trillion (US$7.1 billion), up 5.1% from Rp89.86 trillion in this year revised State Budget.

The final figure is pending on the approval of the House Plenary Session.

The Head of Fiscal Policy Agency of the Finance Ministry Suahasil Nazara said the 3-kg cylinder of LGP will be given subsidy of Rp46.87 trillion, higher than this year’s revised State Budget of Rp44.49 trillion, but lower than early plan of Rp51.13 trillion.

In other macro economic assumptions, the rupiah is set at Rp13,400 to the US dollar, Indonesian Crude Price (ICP) at US$48 per barrel, fuel subsidy volume at 16.23 million kilo liters (kl), comprised of kerosene 610,000 kl and diesel 15.62 million kl, higher than subsidized fuel in the 2017 revised state budget of 16.11 million kl, comprised of kerosene and diesel at 15.50 million kl.

Fuel subsidy is agreed to be set at Rp10.30 trillion.

The volume of subsidized LPG is set higher at 6.45 million tons (MT), up from this year (RAPBN-P) of 6.39 MT. This in line with expected higher needs of the community for 3-kg LPG cylinder.

Nazara said the electricity subsidy is agreed to be set at Rp52.66 trillion plus carry over of Rp5 trillion, up from Rp51 trillion this year (plus carry over of Rp5 trillion. Therefore the electricity subsidy will be at Rp47.68 trillion, higher than this year (RAPBN-P) of RP45.38 trillion.

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