Fuel price subsidy policy in Indonesia has hindered other energy programs, namely energy conservation and energy diversification. This study tries to analyze the impact of fuel price hike to the economic sector. This study utilizes the IO table analysis of Indonesia in 2005, a 66 X 66 classification of domestic transactions on the basis of producer prices. This study examines the impact of the increasing 10 percent, 20 percent and 30 percent of fuel prices to the economic sector. The analysis found that the increasing fuel price would have a devastating impact on the transportation sector. The government should preserve those sectors which exposed the largest impact from the increasing of the fuel price

This paper aims to analyze the impact of infrastructure spending on economic growth in Indonesia, which includes investment in road, port and irrigation infrastructure. The period of observation was 2011-2018, which covered 29 provinces with c...

Existing subsidy arrangements and institutional settings in the Indonesian electricity sector distort investment decisions and lead to higher cost. Electricity supply is characterized by natural monopoly characteristics, requiring different management by governments than sectors with more straightforward market characteristics. Many countries have undergone significant re-structuring of their electricity sectors, away from one, state owned and vertically integrated monopoly supplier to a setting whereby competition has emerged either at the generation level and/or the retail level. Transmission and distribution networks are typically heavily regulated and transparent access arrangements are put in place as part of the restructuring efforts. The analysis showed that the current structure of Indonesia’s electricity sector firmly within Model 2 (the single buyer model) and highlights that Indonesia is currently towards the less-competitive end of the spectrum of Model 2, identifying significant potential for efficiency enhancing reforms within this structure. Constitutional limitations have hampered previous efforts to restructure the sector in Indonesia but there is significant room for incremental reform to improve incentives in the sector and reduce the cost of generation in the process.

This research discusses energy intensity in Indonesia’s manufacturing sector from 1980 to 2015. The manufacturing sector is the second-largest energy-consumer in Indonesia (after the transportation sector) and one of the largest contributors to Indonesia’s output. Thus, it is important to know the energy usage performance of this sector. This study discusses the factors affecting changes in energy consumption in various subsectors of Indonesia’s industry and investigates the energy intensity across manufacturing subsectors. This paper analyses the specific characteristics of energy intensity in the manufacturing sector in Indonesia from 1980 to 2015. This has not been investigated a great deal in the past, particularly when employing the Log Mean Divisia Index II method.The overall energy intensity of Indonesia’s manufacturing sectors has seen a strong and continuous decline, with a reduction of 65% over the 35 yr, reinforced by some limited changes in industry structure towards lower intensity. Over the entire period, this reduction was dominated by increases in energy efficiency within industries, as indicated by a 62% fall in the within-industry intensive index. By contrast, the effect of moving to a less intensive industry structure was much less important (a 9% fall in the structural index). The greatest rise in energy efficiency within the industry happened before the financial crisis (from 1980 to 97). the shock of the financial crisis saw an unexpected reaction when value-added fell by 13% but energy use remained largely unchanged, implying a rise in energy intensity. From 2000 to 2015 the earlier trends resumed, but at a more subdued pace, where over this period aggregate intensity fell by 23%.

Energy subsidy has become an onerous burden for the Indonesian state budget. The Ministry of Finance has provided various forms of fiscal incentives to influence economic actors for implementing energy saving programs i.e. taxation and customs facilities for spare parts in manufacturing energy-efficient appliances. Nevertheless, those incentives are not yet fully affecting the enhancement of energy efficient investment. The Government needs to make a breakthrough in order to catalyse the market which in the long run can generate energy efficiency enhancement projects. This study sought to establish a form of revolving fund scheme by analysing the drawbacks of its implementation