Akmalal Hamdhi, Jakarta – Indonesia should redirect part of its fuel subsidy budget toward accelerating public transportation development across the country, as most subsidized fuel is currently consumed by private vehicle owners rather than public transport users, according to transportation analyst Djoko Setijowarno.
Djoko, who serves on the advisory board of the Indonesian Transport Society (MTI), said fuel subsidies remain a significant burden on the state budget while providing disproportionate benefits to owners of private motorcycles and cars.
"Fuel subsidies need to be evaluated to ensure they are better targeted and deliver broader benefits to society," Djoko said in a statement cited on Monday.
Data presented by Djoko showed fuel subsidy spending reached Rp 551.2 trillion ($31.2 billion) in 2022 before declining to Rp 375 trillion in 2023 and Rp 113.3 trillion in 2024. The figure then rose again to Rp 394.3 trillion in 2025 and is set at Rp 210.1 trillion for 2026.
The transportation sector accounts for about 40% of Indonesia's total fuel consumption. However, citing Energy and Mineral Resources Ministry data, Djoko said around 93% of subsidized fuel is consumed by private vehicle owners.
By comparison, freight transportation receives only about 4% of subsidized fuel allocations, while public passenger transportation accounts for roughly 3%.
According to Djoko, the imbalance suggests energy subsidies have yet to effectively support the development of a more efficient and sustainable public transportation system.
He argued that improving public transportation outside major cities should become a national priority if Indonesia aims to achieve developed-country status by 2045.
"If Indonesia wants to become a developed country, one key indicator is having a reliable public transportation system. With only 19 years left until 2045, improvements to regional public transport must begin now," he said.
Djoko said only 45 out of Indonesia's 514 regional administrations, or about 9%, have succeeded in modernizing their public transportation systems. Even among those regions, many still depend on government support to cover operating costs.
As a result, he proposed that part of the fuel subsidy budget, along with certain transportation-related incentives, be redirected to help local governments upgrade and expand public transport services.
While supporting a shift in subsidy spending, Djoko said incentives for electric vehicles should remain in place but be targeted more carefully. He suggested prioritizing residents in small islands and underdeveloped, frontier, outermost, and border regions, where access to fuel supplies remains limited.
Djoko added that better public transportation could allow governments to offer lower fares or even free services for specific groups, including students, university students, workers, teachers, senior citizens, people with disabilities, and low-income residents.
"Public transportation is not merely a mobility tool but also an economic safety net. In addition to improving fiscal efficiency, a well-functioning public transport system can reduce social risks, improve safety, promote more balanced development, and deliver environmental and urban-planning benefits," he said.
Djoko said strengthening public transportation should be viewed not only as a way to improve state budget efficiency but also as a long-term investment in quality of life and sustainable development.
Source: https://jakartaglobe.id/business/fuel-subsidies-largely-benefit-private-vehicles-not-public-transpor