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Fuel Subsidies in the Spotlight | CASKUS

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Fuel Subsidies in the Spotlight | CASKUS

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The Indonesian government is again in the spotlight regarding its fuel oil (BBM) subsidy policy. A number of economists assess that the current subsidy system provided to the entire community is not fully on target. According to them, households with high incomes also enjoy large subsidies because they generally use more fuel than low-income people.
Experts suggest that the government should gradually change this policy to more targeted direct assistance to people who really need it. In this way, the state budget can be used more efficiently, while low-income groups still receive protection from rising living costs.
On the other hand, some people are worried that changes to the subsidy system could cause an increase in fuel prices and impact transportation costs and prices of basic necessities. The government emphasizes that any policy changes will take into account the economic conditions of society and will be carried out in stages.
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