Indonesia May End Pertalite Subsidies for Wealthier Groups

Indonesia is developing a plan to restrict access to subsidized Pertalite fuel for the wealthiest segments of the population, specifically targeting households in economic desiles 9 and 10. This move is part of a broader effort to ensure that fuel subsidies are more precisely allocated to those who genuinely need them.

Finance Minister Purbaya Yudhi Sadewa indicated that these higher-income groups would likely need to purchase non-subsidized fuels such as Pertamax. "Desiles 9 and 10 cannot buy subsidized fuel. They must pay the price of Pertamax or other fuels," Sadewa stated. He confirmed that the government is collaborating with state-owned energy company PT Pertamina (Persero) to study and implement the proposed limitations.

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Desiles 9, 10 cannot buy subsidized fuel. They must pay the price of Pertamax or other fuels.

While the exact timing for the policy's implementation remains undetermined, officials are currently testing the necessary systems and devising a phased approach. Energy and Mineral Resources Minister Bahlil Lahadalia emphasized the importance of directing the nation's substantial fuel subsidies, which amount to trillions of rupiah, to the intended recipients. "Some subsidies are not right on target. Why should we subsidize the rich? For example, Pertalite. Desiles 9 and 10 still receive subsidies," Lahadalia remarked.

Lahadalia further clarified that the restriction would not apply to motorcycles, which are a common mode of transport for many Indonesians. The government aims to prevent affluent vehicle owners from benefiting from subsidies intended for lower-income citizens, thereby optimizing the use of public funds.

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Some subsidies are not right on target. Why should we subsidize the rich? For example, Pertalite. Desiles 9, 10 still receive subsidies.