International Experience on Energy Subsidy Reforms: How can Indonesia lead the way?

When the Budget Committee of the House of Representatives of the Republic of Indonesia approved the Indonesian government’s Energy Subsidy Reform Plan in April 2021​, it was a huge milestone for the country's energy subsidy policy. This hard-driving plan, which includes LPG and electricity subsidy reform, aims to transform the subsidy mechanism from commodity-based to direct targeted subsidies.

Direct targeted subsidies have financial, environmental, and social benefits as they limit subsidies only to those that need them to meet their energy needs. With the involvement of 29 million poor and vulnerable households and the utilization of payment technology innovation using facial biometric technology, this reform could potentially become a best practice not only for energy subsidy reform, but also for other targeted social assistance reforms. Around the world, energy subsidy reform has mainly just been done through raising energy prices. What Indonesia is planning to do could therefore become a new model of energy subsidy policy reform in the future. The world is now closely watching Indonesia to learn more about this ambitious plan.

The International Institute for Sustainable Development (IISD) organized a High-Level International Policy Dialogue to help move the reform plan forward. This event facilitated a close dialogue amongst policy makers and international experts, providing​ new insights and international examples to support the success of Indonesia's energy policy reform process.

This is the third session in IISD's International Energy, Environmental, and Society Dialogue (IEESD) series.

Agenda

Opening Remarks

MC & Moderator: Adhityani Putri, Executive Director, Yayasan Indonesia Cerah 

Keynote speeches: The Importance of Energy Subsidy Reform for the Economy and Social Welfare

General (Ret) Dr. Moeldoko, S.I.P., Chief of Presidential Staff, Executive Office of the President of the Republic of Indonesia (Download Slides)

Hon Phil Twyford, Minister of State for Trade and Export Growth, New Zealand

Session I: Policymaking Perspective

Indonesian Parliament’s Perspective on Energy Subsidy Reform
MH. Said Abdullah, Chairman of Budget Committee, The House of Representatives of the Republic of Indonesia

Indonesian Government’s Perspective on Energy Subsidy Reform 
Ir. Ego Syahrial, Ph.D, Secretary General, Ministry of Energy and Mineral Resources, Republic of Indonesia (Download Slides)
Febrio Nathan Kacaribu, S.E., MIDEC., Ph.D., Head of Fiscal Policy Agency, Ministry of Finance, Republic of Indonesia

International Government Perspective on Energy Subsidy Reform (Download Slides)
Aldo Ravazzi Douvan, Professor, University of Roma 2 and Luiss and Former President, OECD Committees on Environmental Performance Country Reviews

Session II: Policy Implementation Perspective—How Do We Operationalize Energy Subsidy Reform Policy? The Indonesian Way and Lessons Learned from Other Countries.

Dr. Ir. Bambang Widianto, M.A., Special Staff to Vice President of the Republic of Indonesia & Executive Secretary of the National Team for the Acceleration of Poverty Reduction (2010–2020) (Download Slides)

Ir. Zulkifli Zaini, MBA, President Director, PT. Perusahaan Listrik Negara (Persero) (Download Slides)

India’s LPG Subsidy Reforms (Download Slides)
Shruti Sharma, Associate and Energy Specialist, International Institute for Sustainable Development

South Africa’s Electricity Subsidy Reforms
Dr. Tracy Ledger, Senior Researcher, Public Affairs Research Institute

Closing

HMA Owen Jenkins, British Ambassador to Indonesia and Timor Leste, The British Embassy in Jakarta

MC & Moderator