Jakarta, INTI - Institute for Essential Services Reform (IESR) reminded the Indonesian government to respond to the potential fossil fuel crisis with realistic, measurable policies that do not increase fiscal pressure.
IESR believes that policy directions such as energy transition, efficiency, and supply diversification are appropriate, but their implementation requires deeper technical, economic, and sustainability review. IESR CEO, Fabby Tumiwa, emphasized that not all programs are feasible due to various obstacles, and the government has to be selective.
"Not all proposed programs are feasible to implement due to technical, economic, and social constraints, as well as long-term impacts on the public," said Fabby on Wednesday, April 1, 2026.
Transparency from The Government is Crucial
Previously, the government announced several policies, such as the construction of a 100 GW solar power plant (PLTS), the conversion of electric motors, and the acceleration of B50 biodiesel, which IESR considered risky if not supported by ecosystem readiness and adequate financing. Furthermore, transparency of energy supply data is considered crucial to maintain public trust and prevent panic buying amid global uncertainty.
From a fiscal perspective, IESR warned of a potential surge in energy subsidies of up to IDR 460 trillion if global oil prices remain high at US$94 per barrel, far above the state budget assumptions of US$70. Therefore, subsidy reform is necessary by shifting commodity-based schemes to more targeted direct assistance.
Some Programs are Considered Unrealistic
IESR also assessed that the target of converting 120 million motorcycles to electric is unrealistic due to limited infrastructure and high costs. It also criticized the B50 program, which it considers economically inefficient and potentially increases the subsidy burden.
As a solution, the IESR is pushing for more effective policies such as electrification of transportation, strengthening public transportation, increasing vehicle efficiency, and improving fuel quality.
Conclusion
Institute for Essential Services Reform (IESR) has urged the government to respond to the potential fossil fuel crisis with realistic policies that will not burden the fiscal sector. While the energy transition is considered appropriate, IESR considers that several programs, such as the 100 GW solar power plant (PLTS), electric motor conversion, and B50 biodiesel, are risky if not supported by ecosystem readiness and financing. As an alternative, IESR recommends more effective measures such as transportation electrification, strengthening public transportation, and improving fuel quality.
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