Government Increases Fuel Subsidy Budget in 2024

Economics & Macro

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Adi Ahdiat 22/08/2023 16:30 WIB

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In the 2024 State Budget (RAPBN), the government has allocated Rp25.7 trillion for fuel subsidies for Specific Types of Fuel (JBT) next year, an increase of Rp2.4 trillion compared to 2023.

Indonesia's Budget Allocation for Subsidies on Specific Types of Fuel (JBT) (2017-2024)*

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Government Increases Fuel Subsidy Budget in 2024

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Indonesia's Budget Allocation for Subsidies on Specific Types of Fuel (JBT) (2017-2024)*

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In the 2024 State Budget Draft (RAPBN), the government allocates Rp25.7 trillion for fuel subsidies for Specific Types of Fuel (JBT) next year.

This amount increases by approximately 10%, or Rp2.4 trillion, compared to 2023, which has a projected outlook of Rp23.3 trillion.

This Specific Type of Fuel (JBT) subsidy is specifically provided for solar and kerosene, excluding Pertalite.

Although Pertalite is commonly referred to as "subsidized fuel," in the government's administrative system, Pertalite is categorized as a Special Assignment Fuel Type (JBKP) which does not receive "subsidies," but rather "compensation."

According to information on the official website of the Ministry of Finance, "subsidies" are paid by the government to businesses monthly, according to the realized volume of fuel distribution to the public.

Meanwhile, "compensation" is paid by the government to businesses at once or in stages, according to the shortfall in business income resulting from the government's fuel pricing policy.

In practice, both subsidies and compensation make fuel prices cheaper for consumers.

The 2024 RAPBN does not provide details on the fuel compensation budget for next year.

However, according to the 2022 Central Government Financial Report (Audited), the realization of fuel compensation spending in 2022 reached Rp307.19 trillion. This figure includes the settlement of fuel compensation debt from the 2021 fiscal year, amounting to Rp80.18 trillion.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."