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Govt cuts allocation for energy subsidies in 2025 budget
The government and House of Representatives Budget Committee have slashed planned energy subsidies for next year by Rp 1.12 trillion (US$72.26 million), or 0.54 percent of the allocation proposed in the 2025 draft state budget (RAPBN), because of the rupiah’s appreciation.
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An attendant walks across a gas station of state-owned energy company Pertamina in Kuningan, South Jakarta, in this undated photograph. (JP/Seto Wardhana)
T
he government and House of Representatives Budget Committee have slashed planned energy subsidies for next year by Rp 1.12 trillion (US$72.26 million), or 0.54 percent of the allocation proposed in the 2025 draft state budget (RAPBN), to Rp 203.41 trillion, because of the rupiah’s appreciation.
Finance Minister Sri Mulyani Indrawati said the cut was owed to a 100-rupiah decline in the exchange value of the United States dollar to Rp 16,000.
“For the total energy subsidy, the decision or agreement in [Working Committee] A is Rp 203.41 trillion, down Rp 1.1 trillion from what we proposed in the 2025 RAPBN, which was higher because of the [assumed] exchange rate,” she told the House of Representatives Budget Committee during a hearing in Jakarta on Wednesday, as Kompas reported.
Thus, in the 2025 state budget, subsidies for certain types of fuel oil and 3-kilogram liquefied petroleum gas (LPG) canisters are pegged at Rp 113.7 trillion, 0.52 percent lower than the Rp 114.3 trillion allocated in the RAPBN.
Meanwhile, the electricity subsidy is set at Rp 89.7 trillion, 0.55 percent lower than the Rp 90.2 trillion earmarked in the RAPBN.
Read also: Govt may restrict subsidized fuel sales on Oct. 1, energy minister says
The Finance Ministry said the energy subsidy cut was entirely attributable to the change in the rupiah’s exchange rate, not to the impending restrictions on sales of subsidized fuel brands Pertalite and Solar.
