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Bahlil unveils new fuel subsidy scheme
The new fuel subsidy scheme will combine goods subsidies and direct cash assistance (BLT).
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Renegotiating fuel subsidies: Energy and Mineral Resources Minister Bahlil Lahadalia waves before the Twilight Parade at Pancasila Field, Military Academy, Magelang, Central Java, on Oct. 25. Bahlil unveiled a new fuel subsidy scheme combining goods subsidies and direct cash assistance (BLT) in Jakarta on Nov. 27. (Antara Foto/Muhammad Adimaja)
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nergy and Mineral Resources Minister Bahlil Lahadalia has revealed that the new fuel subsidy scheme would involve a combination of subsidized goods and direct cash transfer (BLT). This hybrid model aims to strengthen purchasing power while ensuring that subsidies are effectively targeting those who truly need them.
"Later, the President [Prabowo Subianto], God willing, with us [the ministry] will announce it. But the scheme is most likely blending [subsidized goods and BLT]," Bahlil said after casting his vote for the regional head election in Jakarta on Wednesday, as quoted by tempo.co.
While Bahlil did not mention an exact date, he confirmed that Prabowo would soon announce the full plan.
"If asked when it will be announced, we will see a good day and date. After this, I will report to the finance minister for the initial stage, maybe we will push first for a buffer. The BLT will run first," he said.
Bahlil emphasized that the goal was not to eliminate subsidies, but rather to better allocate them to those most in need. He also clarified that only vehicles with yellow license plates, meaning public transportation vehicles, remain eligible for subsidized fuel.
"One of [the proposals] is that those who are entitled to receive subsidies are vehicles with yellow plates. Angkot [public minivan], why? Transportation costs cannot increase," said Bahlil.
Previously, Bahlil had outlined several alternatives for better-targeting subsidies, especially since wealthier individuals have benefited from subsidized fuel.
One proposal is to shift subsidies to BLT, but he acknowledged this would impact sectors such as public transport and micro, small and medium enterprises (MSMEs), as well as public facilities like schools and hospitals, which currently rely on subsidies.
Bahlil also mentioned an alternative approach, which is to maintain subsidies for public facilities while allocating a portion of funds for BLT. Another option could involve adjusting prices on certain goods while still providing subsidies.
Bahlil also said that online ojek (motorcycle taxis) would not be eligible for subsidized fuel.
"[They] are not [subsidized]," Bahlil said, as quoted by sindonews.com.
The reason for excluding online ojek was that fuel subsidies were meant for individuals or public transportation, not for vehicles used in commercial enterprises like online ojek.
Bahlil also noted that some online ojek drivers do not even own the bikes they ride, as they may rent them from other people. This further disqualifies them from receiving subsidies.
