Indonesia, the World's Largest LPG Subsidizer

Indonesia was the world's largest provider of LPG subsidies in 2021. This is recorded in a World Bank report titled *Detox Development, Repurposing Environmentally Harmful Subsidies* (June 2023).

According to the report, throughout 2021, the Indonesian government disbursed LPG subsidies worth USD 2.2 billion, or approximately Rp 30.8 trillion (assuming the 2021 average exchange rate of Rp 14,269 per USD).

Other countries that disbursed significant LPG subsidies include Algeria, Ecuador, Saudi Arabia, Venezuela, Bolivia, Russia, Angola, Czech Republic, and Sri Lanka, with details as shown in the chart above.

Of the 191 countries surveyed by the World Bank, only 15 disbursed LPG subsidies in 2021.

In addition to those listed above, similar subsidies were also found in Brunei Darussalam, the Kyrgyz Republic, Bangladesh, Costa Rica, and Tajikistan.

Globally, fossil fuel subsidies disbursed by countries worldwide in 2021 totaled an estimated USD 577 billion.

This figure includes all subsidies for consumers and producers, for LPG, kerosene, natural gas, coal, fossil fuel electricity, and various petroleum products.

The World Bank criticized this, as fossil fuel subsidies are considered to have detrimental impacts on both the environment and public health.

"Governments worldwide are spending trillions on inefficient subsidies that worsen climate change," stated the World Bank in its report.

"Fossil fuel use, driven by subsidies, is a major contributing factor to 7 million premature deaths annually from air pollution," it continued.

In response, the World Bank recommends that countries redirect fossil fuel subsidy funds to programs supporting climate change mitigation and a just energy transition.

"Amidst constrained budgets, rising debt, widening inequality, and worsening environmental degradation, governments must prioritize comprehensive subsidy reforms," said the World Bank.

"The belief that subsidy reforms will affect the poor is not always supported by data. In some cases, such as with energy subsidies, wealthier groups benefit more due to their higher consumption," it continued.

"To protect vulnerable groups during subsidy reforms, we recommend providing compensation to the poorest through cash transfers or direct assistance," said the World Bank.