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Indonesia to reduce fuel subsidies in 2025

The government and the House of Representatives (DPR) of Indonesia have agreed to reduce the volume of subsidised fuel in the 2025 Draft State Budget (RAPBN), aiming at ensuring a more targeted distribution of subsidies.

A fuel station attendant serves customers in Jakarta. Next year, Indonesia will reduce the volume of subsidised fuel to 19.41 million kilolitres from the 2024 target of 19.58 million kilolitres. (Photo: Antara) reduce the volume of subsidized fuel in the 2025 Draft State Budget (RAPBN(Photo: Antara)
A fuel station attendant serves customers in Jakarta. Next year, Indonesia will reduce the volume of subsidised fuel to 19.41 million kilolitres from the 2024 target of 19.58 million kilolitres. (Photo: Antara) reduce the volume of subsidized fuel in the 2025 Draft State Budget (RAPBN(Photo: Antara)

Jakarta (VNA) - The government and the House of Representatives (DPR) of Indonesia have agreed to reduce the volume of subsidised fuel in the 2025 Draft State Budget (RAPBN), aiming at ensuring a more targeted distribution of subsidies.

Energy and Mineral Resources Minister Bahlil Lahadalia announced that the volume of subsidised fuel, which includes kerosene and diesel, will be reduced to 19.41 million kilolitres, down from the 2024 target of 19.58 million kilolitres.

This reduction is part of a broader plan for a more efficient and targeted distribution of subsidies in 2025, the official said, adding that the ministry and the state oil and gas company Pertamina have conducted evaluations and studies to ensure the subsidies are accurately targeted.

When subsidies are well-targeted, they lead to greater efficiency, Bahlih said, adding that the government wants to ensure that these fuel subsidies will benefit the poor.

He noted that the government and the DPR have agreed to maintain the diesel subsidy at 1,000 IDR per litre. Meanwhile, the volume of subsidised LPG for 2025 will be increased to 8.17 million tonnes, higher than the 2024 target of 8.07 million tonnes, driven by rising public demand.

The Ministry of Energy and Mineral Resources is exploring the development of a gas network and the growth of the LPG industry in Indonesia, Bahlil said.

He went on to say that while there are challenges related to raw materials, the ministry is working with the oil and gas regulator SKK Migas and Pertamina to address these issues./.

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