Beyond Fossil Fuels: Indonesia's fiscal transition

This report analyzes Indonesia's fiscal relationship with fossil fuels, examining the decline in production revenues, the inefficiency of consumption subsidies, and the potential for investing in renewable energy to drive economic diversification.

• Indonesia has significantly reduced its fiscal reliance on upstream oil and gas revenues since 2001, with these revenues dropping from 35 per cent of total revenues (7 per cent of GDP) in 2001 to 6 per cent (less than 1 per cent of GDP) by 2016, while maintaining stable GDP growth and budget deficits.
• The Indonesian government underutilizes fiscal space from energy consumption taxes compared to other BRIICS countries; between 2014 and 2016, fuel consumption taxes (VAT and motor fuel tax) generated only 0.57 per cent of GDP, which is roughly a third of the 1.7 per cent of GDP spent on fuel and electricity subsidies.
• Current fuel and electricity subsidies are viewed as an inefficient method for redistributing declining fossil fuel export rents. The report suggests that savings from subsidy reforms and fossil fuel taxes should be redirected toward social development, economic diversification, and renewable energy.

APA

Braithwaite,, I. G. (2019). Beyond Fossil Fuels: Indonesia's fiscal transition. International Institute for Sustainable Development. https://www.iisd.org/publications/report/beyond-fossil-fuels-indonesias-fiscal-transition

Chicago

Braithwaite,, Ivetta Gerasimchuk,David. Beyond Fossil Fuels: Indonesia's fiscal transition. International Institute for Sustainable Development, 2019. https://www.iisd.org/publications/report/beyond-fossil-fuels-indonesias-fiscal-transition.

Wikipedia

{{cite report |last1=Braithwaite, |first1=Ivetta Gerasimchuk,David |title=Beyond Fossil Fuels: Indonesia's fiscal transition |publisher=International Institute for Sustainable Development |date=21 January 2019 |url=https://www.iisd.org/publications/report/beyond-fossil-fuels-indonesias-fiscal-transition |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{braithwaite2019beyond, author = {Braithwaite,, Ivetta Gerasimchuk,David}, title = {{Beyond Fossil Fuels: Indonesia's fiscal transition}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = jan, url = {https://www.iisd.org/publications/report/beyond-fossil-fuels-indonesias-fiscal-transition}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }