The Future of Social Welfare Programs in Indonesia: From Fossil-Fuel Subsidies to Better Social Protection

This briefing note analyzes the role of fossil-fuel subsidies in Indonesia's social welfare strategy, arguing that while these subsidies were traditionally used to alleviate poverty and control inflation, they have become expensive, inefficient, and regressive.

• Indonesia has historically utilized fossil-fuel subsidies to manage inflation and reduce poverty, but the policy is now viewed as regressive because wealthier citizens receive a larger share of the benefits than poorer citizens.
• In 2024, Indonesia's expenditure on energy subsidies totaled IDR 713.5 trillion, with fossil fuels accounting for nearly 90% of that spending.
• Transitioning from subsidized LPG to electric induction cooking could provide Indonesia with annual savings of up to IDR 12 trillion, reduce dependence on imported fuel, and enhance public health.

APA

Perdana,, A. (2014). The Future of Social Welfare Programs in Indonesia: From Fossil-Fuel Subsidies to Better Social Protection. International Institute for Sustainable Development. https://www.iisd.org/publications/report/future-social-welfare-programs-indonesia-fossil-fuel-subsidies-better-social

Chicago

Perdana,, Ari. The Future of Social Welfare Programs in Indonesia: From Fossil-Fuel Subsidies to Better Social Protection. International Institute for Sustainable Development, 2014. https://www.iisd.org/publications/report/future-social-welfare-programs-indonesia-fossil-fuel-subsidies-better-social.

Wikipedia

{{cite report |last1=Perdana, |first1=Ari |title=The Future of Social Welfare Programs in Indonesia: From Fossil-Fuel Subsidies to Better Social Protection |publisher=International Institute for Sustainable Development |date=3 April 2014 |url=https://www.iisd.org/publications/report/future-social-welfare-programs-indonesia-fossil-fuel-subsidies-better-social |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{perdana2014future, author = {Perdana,, Ari}, title = {{The Future of Social Welfare Programs in Indonesia: From Fossil-Fuel Subsidies to Better Social Protection}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = apr, url = {https://www.iisd.org/publications/report/future-social-welfare-programs-indonesia-fossil-fuel-subsidies-better-social}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }