The Ministry of Energy and Mineral Resources (ESDM) announced this week that the Indonesian government is considering setting energy subsidies at 186.9 trillion rupiahs (11.9 billion dollars) in 2024.
ESDM Minister Arifin Tasrif stated that out of this subsidy, 113.3 trillion rupiahs would be allocated to fuel and LPG, while 73.6 trillion rupiahs would be directed towards electricity subsidies. Tasrif added that there might be a potential increase in crude oil prices and demand.
The 2024 subsidy target is 17% higher than the 159.6 trillion rupiahs set for 2023. Of this subsidy, 95.6 trillion rupiahs will be allocated to the fuel and LPG sector, and the remaining 64 trillion rupiahs will be earmarked for the electricity sector. Indonesia, as the largest buyer of gasoline in the Asia-Pacific
region, aims to protect the purchasing power of its citizens amidst an expected increase in gasoline imports.
Despite OPEC's expectations of an increase in oil demand, the International Energy Agency (IEA) anticipates a record level of oil supply and a slowdown in demand growth in 2024. As of now, Brent and WTI crude oil prices stand at $79.29 per barrel and $74.38 per barrel, respectively.
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