Energy subsidy bill seen to soar by Rp 300t without renewables push
National energy subsidy and compensation expenditures could skyrocket by Rp 300 trillion in the 2026 fiscal year unless the country accelerates its transition to new and renewable energy, the Energy and Mineral Resources Ministry has warned.
The Indonesian government is bracing for a staggering 30% increase in national energy subsidy and compensation expenditures, potentially reaching Rp 300 trillion by the 2026 fiscal year, according to the Energy and Mineral Resources Ministry. Deputy Energy Minister Yuliot Tanjung warned that global geopolitical tensions, such as the U.S.-Iran conflict and Russia-Ukraine war, are disrupting energy supply chains, driving up commodity prices, inflation, production costs, and logistics expenses worldwide.
The ministry projects that without a push for renewable energy, this volatility could trigger a massive fiscal deficit, requiring an additional Rp 300 trillion from the 2026 state budget. Currently, the government is compensating for these rising costs through substantial fuel, LPG, and electricity subsidies, but the financial strain is becoming unsustainable.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
