Power subsidy costs reach Rp59.9 trillion by April, set to rise in 2027
Friday, June 5 2026 - 08:49 AM WIB
By Pandu Setiabudi
Indonesia's electricity subsidy and compensation spending reached Rp59.93 trillion in the first four months of 2026, accounting for nearly a quarter of the full-year state budget allocation, according to data presented by the Energy and Mineral Resources Ministry.
The realization comprised Rp30.19 trillion in electricity subsidies and Rp29.74 trillion in compensation payments, Acting Director General of Electricity Tri Winarno told a hearing with Commission XII of the House of Representatives (DPR RI) on June 4.
The figure represents 24.4% of the total electricity subsidy and compensation allocation in the 2026 State Budget (APBN), which amounts to Rp245.58 trillion, comprising Rp100.83 trillion in subsidies and Rp144.75 trillion in compensation.
“As of April, the realization of electricity subsidies and compensation has reached Rp59.9 trillion, consisting of Rp30.19 trillion in subsidies and Rp29.74 trillion in compensation,” Tri said.
In terms of electricity sales, subsidized electricity sales reached 25.97 TWh by April, out of the full-year 2026 target of 81.56 TWh. Meanwhile, non-subsidized electricity sales totaled 78 TWh, against an annual target of 258.43 TWh.
For the 2027 State Budget Draft (RAPBN 2027), Tri said electricity subsidies are projected to reach Rp108.43 trillion, while compensation payments are estimated at Rp165.59 trillion, bringing the total subsidy and compensation requirement to Rp274.02 trillion.
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The projection is based on a total electricity sales target of 348.78 TWh, consisting of 83.66 TWh of subsidized sales and 265.12 TWh of non-subsidized sales.
“For the 2027 fiscal year, we propose electricity subsidies of Rp108.43 trillion, with subsidized electricity sales targeted at around 83.6 TWh, or 24% of the projected total electricity sales of 348.78 TWh,” Tri said.
However, it should be noted that the projections are based on macroeconomic assumptions from an inter-departmental meeting dated February 6, 2026. The assumptions include an exchange rate of Rp16,700 per US dollar, an Indonesian Crude Price (ICP) of US$65 per barrel, and inflation of 2.5%.
Over the past five years, Indonesia’s electricity subsidy and compensation budget has nearly doubled. The combined allocation stood at Rp123.13 trillion in 2022, rising to Rp142.63 trillion in 2023, Rp177.25 trillion in 2024, and Rp200.19 trillion in 2025. For 2026, the total allocation is projected at Rp245.58 trillion.
According to Tri, one of the key drivers behind the rising subsidy and compensation burden is the prolonged absence of electricity tariff adjustments.
“The absence of tariff adjustments over a long period has become one of the main factors causing subsidy and compensation requirements to continue increasing year after year,” Tri said.
Editing by Reiner Simanjuntak