Electricity Subsidy Spending Increased by 17% in 2022

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Adi Ahdiat 23/06/2023 13:50 WIB

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According to the Supreme Audit Agency (BPK) report, electricity subsidy spending in fiscal year 2022 reached Rp56.1 trillion, a 17% increase compared to 2021.

Realization of Indonesian Electricity Subsidy Spending (2013-2022)

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Realization of Indonesian Electricity Subsidy Spending (2013-2022)

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According to a report by the Indonesian Supreme Audit Agency (BPK), the Indonesian government disbursed Rp56.1 trillion (approximately US$3.7 billion) for electricity subsidies in the 2022 fiscal year, a 17% increase year-on-year (yoy) compared to 2021.

This marks the first increase after a continuous decline in electricity subsidy spending from 2019 to 2021.

According to the government's statement in the 2023 State Budget (APBN) Financial Note, the increase in spending in 2022 was mainly due to the electricity discount policy implemented in 2020-2021 to mitigate the impact of the Covid-19 pandemic.

"The electricity discount policy was utilized by 32.1 million customers out of a total of 32.9 million subsidized household and UMKM customers eligible for the discount," as quoted from the 2023 APBN.

For 2023, the APBN further increased the budget allocation for electricity subsidies to Rp72.6 trillion (approximately US$4.8 billion).

This increase is primarily influenced by the rise in the Basic Cost of Provision (BPP) of electricity due to various factors, such as the increase in fuel mix prices, increased use of biomass fuel for coal-fired power plant (PLTU) co-firing, and the increase in Value Added Tax (VAT).

Quoting from the 2023 APBN, the policy direction for electricity subsidies this year aims to:

1. Provide targeted electricity subsidies aligned with economic recovery and public purchasing power;
2. Provide targeted electricity subsidies for poor and vulnerable households; and
3. Encourage the development of more efficient renewable energy.

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."