Indonesia’s Effort to Phase Out and Rationalise

After summarising the key aspects of Indonesia’s energy landscape, the report addresses each stage of the supply chain for fossil fuels, discussing in detail the subsidies (and other measures) that Indonesia and the review team have identified in the course of the review process, as per the terms of reference negotiated between Indonesia and Italy. [...] The next section, provides an overview of the energy sector in Indonesia; Indonesia’s fossil fuel subsidy from the 2014 reforms onwards and highlights the impact of reforms; explanation on how Indonesia managed to make the recent reform happen, and the rest of the report concludes with Indonesia’s efforts to shift consumption of fossil fuels to renewable energy. [...] Ministry of Energy and Mineral Resources as the regulator commits to keep the supply of electricity efficiently and to maintain the balance of interests of the electricity provider (PLN) and customers; 2. [...] The role of inflation in the recent Indonesian reforms has been notable, as reflected in the difference in inflationary response between the initial price increases in November 2014 and the subsequent price decreases in January 2015. [...] However, the LPEM (2015) estimated that the impact of the 20% increase in the basic electricity tariff in 2014 in fact had little effect on the general rate of inflation, ranging from 1.07% to 3.17%, although the basic electricity tariff in the two dominant groups, household and industry respectively increased by around 30% and 18% (53% for larger industries).