Pertalite sales to be limited for top income groups to ensure targeted subsidies

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, has clarified that the policy to limit the purchase of subsidized fuel, specifically Pertalite, is designed to ensure that subsidies are distributed more effectively and reach the most deserving recipients. This initiative addresses concerns raised by the House of Representatives regarding leaks in the distribution of subsidized fuel.

"The price is not increasing, okay? But when I was in the DPR, I was ordered to ensure that the subsidies are more targeted," Sadewa told reporters. He emphasized that the policy would be implemented in stages, allowing the government to assess its impact on the economy. "We will do it gradually to see what the impact is. For example, if I stop the 10th decile from buying Pertalite, what will be the impact on the economy? So, we will do it gradually," he added.

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The price is not increasing, okay? But when I was in the DPR, I was ordered to ensure that the subsidies are more targeted.

The restrictions will specifically target individuals within the 9th and 10th income deciles. These groups will be guided towards purchasing non-subsidized fuel options. The government aims to refine the subsidy program to prevent it from being disproportionately consumed by higher-income segments of the population.

This move comes as the government seeks to optimize its budget and ensure that social assistance programs, including fuel subsidies, provide maximum benefit to lower-income households. The gradual implementation allows for adjustments based on observed economic effects, ensuring a smoother transition and mitigating potential disruptions.

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We will do it gradually to see what the impact is. For example, if I stop the 10th decile from buying Pertalite, what will be the impact on the economy? So, we will do it gradually.