August 26, 2026 | 05:00 pm
TEMPO.CO, Jakarta - Almost every year, the government increases its energy subsidy budget. The increases have been particularly steep over the past two years. From 2022 to 2025, actual energy-subsidy spending averaged Rp174.7 trillion (about US$9.8 billion) per year. This year, the government expects the figure to reach Rp227.3 trillion (US$12.8 billion).
In 2027, energy-subsidy needs are expected to rise again. "Next year's energy subsidies will amount to Rp272.95 trillion (US$15.4 billion)," Finance Minister Purbaya Yudhi Sadewa said at a press conference on the 2027 Financial Note and Draft State Budget on Friday, August 14, 2026.
Subsidies for 3-kilogram liquefied petroleum gas (LPG) cylinders account for more than half of the increase in the energy subsidy budget. The allocation will rise from Rp90.4 trillion (US$5.1 billion) this year to Rp114.1 trillion (US$6.4 billion) in 2027. Distribution has also yet to fully reach its intended recipients. In Book II of the 2027 Draft State Budget Financial Note, the government said 3-kilogram LPG was still being distributed through an open system. Data on people eligible for the subsidy also need to be improved and updated regularly.
More recently, ideas for replacing LPG have emerged, ranging from converting coal into dimethyl ether (DME) to the latest proposal of using compressed natural gas (CNG).
The LPG Conversion Dilemma
10 jam lalu
The conversion from LPG to compressed natural gas lacks transparency. Safety matters more than savings.
LPG Out, Compressed Gas In
1 hari lalu
The government plans to develop compressed natural gas in cylinders to replace subsidized LPG. The move carries risks of high costs and safety concern
Indonesia Teams Up With Pindad to Produce 3-Kg CNG Cylinders
35 hari lalu
Indonesia's Energy and Mineral Resources (ESDM) Ministry is teaming up with Pindad to manufacture compact 3-kg compressed natural gas (CNG) cylinders.
Indonesia to Import CNG Cylinders as Alternative to 3-kg LPG
19 Mei 2026
The Director General of Oil and Gas of the Ministry of Energy and Mineral Resources stated that Indonesia is not yet able to produce 3-kilogram CNG canisters.
Energy Minister Bahlil Ensures Subsidies for CNG
7 Mei 2026
Minister Bahlil Lahadalia confirms the government will continue subsidies for CNG as it prepares to replace 3kg LPG antar
Indonesia Pushes 3kg CNG as LPG Alternative, 40% Cheaper
3 Mei 2026
Minister of Energy and Mineral Resources Bahlil Lahadalia revealed the government's plan to develop 3 kg compressed natural gas (CNG) as an alternative to Liquefied Petroleum Gas (LPG).
Bahlil: Indonesia to Explore CNG Production to Cut LPG Imports
28 April 2026
The Indonesian government is discussing ways to reduce the dependency on imported Liquefied Petroleum Gas (LPG) which amounts to about 7 million tons per year.
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