The transformation of the fiscal policy is aimed at enabling beneficiary households to directly benefit from the policy, said chief of the fiscal policy board at the Finance Ministry, Febrio Kacaribu, during a meeting with the budget committee of the House of Representatives (DPR).
"The transformation of the people-based subsidy in the context of LPG, for instance, is directed towards the social protection program. We hope this could work starting 2022," he said in a press statement released on Tuesday.
The subsidy for the 3-kilogram LPG cylinder has missed the target since the difference between the retail price and the reference price is Rp7 thousand per cylinder, he revealed.
Because of the subsidy, the community, including middle and upper class people, can freely buy the 3-kilogram cylinder LPG, he said.
"People who are enjoying the subsidy are those who are not entitled to it. That is the condition we are going to improve in the future," he remarked.
In 2022, the 3-kilogram LPG cylinder and kerosene will be sold at an economic price to eliminate market price disparities, he informed.
The subsidy will be given to targeted households through direct non-cash assistance, he said.
The targeted households will include beneficiary families, micro businesses, farmers, and fishermen entitled to receive the subsidy, in accordance with the integrated data on social welfare from the Social Affairs Ministry, he added.
Based on the data, 36 percent of the subsidy has gone to 40 percent of the poor people, and 39.5 percent of the subsidy has gone to 40 percent of well-to-do families, he pointed out.
The other consideration for revising the scheme has been that 72.1 percent of the LPG is imported, while 27.9 percent of it comes from domestic production, he said.
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