Indonesia's Government Sets 2023 Subsidy Spending Target at Rp297.2 Trillion: Here's the Breakdown

The Indonesian government has allocated Rp297.2 trillion (approximately US$20 billion based on current exchange rates) for subsidy spending in the 2023 State Budget (RAPBN). This is higher than the Rp284.6 trillion outlook for 2022.

The majority of next year's subsidy budget is allocated for energy. Specifically, Rp210.7 trillion is earmarked for energy subsidies and Rp86.5 trillion for non-energy subsidies.

In 2022, energy subsidy spending comprised Rp20.9 trillion for specific types of fuel (BBM), Rp117.4 trillion for 3kg LPG cylinders, and Rp72.3 trillion for electricity subsidies.

The 2023 budget calculation for specific types of BBM and 3kg LPG cylinders uses the following assumptions and parameters:

* The exchange rate of the Indonesian Rupiah against the US dollar.
* Fluctuations in the Indonesian Crude Price (ICP).
* A limited subsidy of Rp1,000/liter for solar fuel.
* A volume of 17 million kiloliters (kl) of solar fuel and 0.5 million kl of kerosene.
* A volume of 8.0 million metric tons of 3kg LPG cylinders.

The targeted non-energy subsidy is Rp86.5 trillion, with the following breakdown:

* Fertilizer subsidy: Rp25.3 trillion
* Public Service Obligation (PSO): Rp7.8 trillion
* Program loan interest: Rp45.6 trillion
* DTP Tax: Rp7.9 trillion