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View all search resultsFirst introduced in 2023, the previous conversion scheme offered buyers a Rp 7 million subsidy for new electric motorcycle purchases and a Rp 10 million subsidy to convert conventional two-wheelers into electric ones.
The current setup asks PLN to be planner, procurer and operator. That was useful in the past decades, but today it blurs incentives, slows competitive procurement and makes it hard for investors to price risk.
The government is currently revising the subsidy scheme for the sea toll program amid concerns that it has fallen short of its objectives. Introduced by the administration of President Joko “Jokowi” Widodo, the program aims to improve national logistics connectivity and narrow price disparities between Western and Eastern Indonesia, where goods have been traditionally more expensive than on Java. After nearly a decade of implementation, however, price gaps have barely shifted, raising questions about the effectiveness of the subsidy.
The Public Service Obligation (PSO) subsidy for MRT Jakarta in the 2026 regional budget (APBD), which had been cut to Rp 536.7 billion (US$32.11 million), is to be increased to approximately Rp 700 billion, according to MRT president director Tuhiyat.
An aggressive biodiesel push could pile pressure on energy subsidies in the state budget due to fluctuations in palm oil prices and squeeze already limited feedstock supplies that are also crucial for other industries.
The administration of Prabowo Subianto is reforming the disbursement of fuel and electricity subsidies to improve state budget efficiency. These subsidies have long been criticized for disproportionately benefiting upper-middle-class households, who consume more energy, rather than the poor and vulnerable groups they are intended to support. As a result, the government now aims to better target subsidy distribution and reduce its long-standing fiscal burden. The urgency to optimize subsidy spending has also grown amid rising expenditures for several major government programs.
Cross-pillar coordination within ASEAN and acceleration of all integration initiatives should become the main agenda, while at the same reviving ASEAN’s role in the greater Asia region, and Indo-Pacific.
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