An alternative policy for LPG subsidy, Ali Wardhana Building 7th Floor, Senin, 16. September 2019



An alternative policy for LPG subsidy
M. Yusmal Nikho (Fiscal Policy Agency, Ministry of Finance/BKF), Rullan Ruladi (PROSPERA) and Astrid Dita (PROSPERA)
Abstract: In 2007 LPG subsidy was introduced in Indonesia as part of an effort to phase-out kerosene due to the building up of pressure to the State Budget from oil price increase at the time. At first, it seems like a rational choice, as the gap between the market price of kerosene and LPG is quite substantial. However, the non-existence of an exit strategy leads to increasing budgetary burden as demand for LPG consolidates. The fiscal pressure is also building up due to the price-fixing mechanism that leaves no room for price adjustment. Limited domestic production also leads to increasing LPG imports, further exposing the State Budget to external volatilities in the exchange rate and energy price. An alternative policy is required to address the multiple issues that are currently affecting the effectiveness of the LPG subsidy from policy design, planning and budgeting, and implementation stages, which include the pervasive inclusion error


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FKP schedule
2019

Oktober: The SMERU Research Institute
November: FE UNSRI and CEDS UNPAD
Desember: Pusat Studi Hukum dan Kebijakan (PSHK)

2020

Januari: tbd
Februari: tbd
Maret: WRI Indonesia dan SDGs Center Universitas Hasanuddin
April: P2E LIPI
Mei: LPEM FEB UI
Juni: tbd
Juli: Center for Indonesian Policy Studies (CIPS)
Agustus: LD FEB UI
September: Article 33 Indonesia
October: The SMERU Research Institute
November: CEDS UNPAD
Desember: Pusat Studi Hukum dan Kebijakan (PSHK)

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An alternative policy for LPG subsidy

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