Indonesia's 2026 Subsidy Spending to Increase by 10%, Largest Allocation for Electricity

The government targets subsidy spending in the 2026 State Budget (RAPBN) to reach Rp318.9 trillion, a 10.7% increase compared to the 2025 outlook of Rp288.2 trillion. Energy subsidies are targeted at Rp210.1 trillion, and non-energy subsidies at Rp108.8 trillion.

"Energy subsidies and social assistance programs continue to be driven towards greater accuracy, based on the National Single Socioeconomic Data or DTSEN," said Prabowo in delivering the Financial Note and RAPBN 2026 on Friday (August 15, 2025).

Based on the RAPBN, several subsidy spending items have increased. Electricity subsidy spending, for example, is targeted at Rp104.6 trillion, a 17.4% increase compared to the 2025 outlook.

The following is a complete breakdown of energy and non-energy subsidy spending items for the 2026 fiscal year:

• Certain types of BBM (fuel): Rp25.1 trillion
• 3 kg LPG cylinders: Rp80.3 trillion
• Electricity: Rp104.6 trillion
• Fertilizer: Rp46.9 trillion
• Public Service Obligation (PSO): Rp9 trillion
• Program Credit Interest: Rp42.3 trillion
• DTP Tax: Rp10.6 trillion

In the 2025 outlook, energy subsidy spending reached Rp183.9 trillion, and non-energy subsidies reached Rp104.3 trillion. Broken down by type, electricity and 3 kg LPG cylinder subsidies received the largest allocations, at Rp89.1 trillion and Rp68.7 trillion respectively.

Up to the first half of 2025, the realization of energy subsidy spending only reached Rp66.9 trillion, or 36.4% of the fiscal year outlook. This includes electricity subsidies reaching Rp36.6 trillion and BBM and 3 kg LPG cylinder subsidies reaching Rp30.3 trillion.

Meanwhile, the realization of non-energy subsidies in the first half of 2025 reached Rp25.9 trillion, or 24.8% of the fiscal year outlook. The largest disbursement of non-energy subsidies was fertilizer subsidies, reaching Rp10.3 trillion.

(Read: Government Targets Rp2.357.7 Trillion in Tax Revenue in 2026)