LPG Subsidy Reform in Indonesia: Lessons learned from international experience

The report advocates for Indonesia to reform its LPG subsidies, which currently drain the national budget and disproportionately benefit wealthier citizens. It suggests that crises, such as COVID-19, can serve as opportunities for reform rather than reasons for delay. The document recommends shifting subsidies toward the poor, implementing robust data collection for beneficiaries, executing a public endorsement plan, and leveraging low oil prices to mitigate economic shocks.

• Indonesia's current LPG subsidies are financially unsustainable and socially inequitable, as the majority of the benefits accrue to wealthier populations rather than the poor.
• The Indonesian government has repeatedly delayed the implementation of a closed distribution system for LPG subsidies, citing the COVID-19 crisis as a justification.
• The report proposes four specific actions for Indonesia: redirecting subsidy funds from the wealthy to the vulnerable, establishing a strong data collection process for beneficiaries, creating a public endorsement and communication plan, and utilizing low oil prices to reduce opposition to reform.

APA

Boelts,, J. K. M. B. (2021). LPG Subsidy Reform in Indonesia: Lessons learned from international experience. International Institute for Sustainable Development. https://www.iisd.org/publications/lpg-subsidy-reform-indonesia

Chicago

Boelts,, Jonas Kuehl,Martha Maulidia,Kavya Bajaj,Silke. LPG Subsidy Reform in Indonesia: Lessons learned from international experience. International Institute for Sustainable Development, 2021. https://www.iisd.org/publications/lpg-subsidy-reform-indonesia.

Wikipedia

{{cite report |last1=Boelts, |first1=Jonas Kuehl,Martha Maulidia,Kavya Bajaj,Silke |title=LPG Subsidy Reform in Indonesia: Lessons learned from international experience |publisher=International Institute for Sustainable Development |date=19 May 2021 |url=https://www.iisd.org/publications/lpg-subsidy-reform-indonesia |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{boelts2021lpg, author = {Boelts,, Jonas Kuehl,Martha Maulidia,Kavya Bajaj,Silke}, title = {{LPG Subsidy Reform in Indonesia: Lessons learned from international experience}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = may, url = {https://www.iisd.org/publications/lpg-subsidy-reform-indonesia}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }