Jakarta, IO – The electric stove conversion program has been widely discussed in the public sphere in recent months. The program, expected to be a solution to state-owned electricity company PT. PLN’s electricity oversupply as well as a more targeted measure to reduce energy subsidies, finally scraped through with an official announcement by the PLN President Director. The decision to cancel the program is emblematic of a policy climbdown in the face of mounting public criticism.
The PLN statement came on the heels of a previous statement from the Coordinating Economic Minister and Energy and Mineral Resources (ESDM) Minister, on the pretext that it has not been jointly discussed with and decided with the House of Representatives. However, the cancelation cannot be separated from the public skepticism with regard to the urgency and benefits of the program for consumers. Scathing criticism was also delivered by several MPs, in particular Mulan Jameela, who complained that electric stoves are “incompatible” for cooking various Indonesian specialty foods.
The criticism went viral and received widespread support from Indonesian netizens who were also dismayed and doubtful of any benefits to be derived from making the switch. Is the public anxiety reasonable or is it simply because people have yet to receive complete information and facts? The author will try to discuss in detailed and balanced manner the dynamics surrounding the electric stove conversion policy.
The context
The program started out as an initiative to respond to the ballooning subsidy for the 3-kg LPG (cooking gas) canisters, from Rp54.15 trillion in 2019, down to Rp32.81 trillion in 2020 due to the pandemic, before it rose higher than the pre-pandemic level to Rp67.6 trillion in 2021. This year, the Finance Ministry projected the subsidy will double to a whopping Rp134.8 trillion; and next year to Rp117.4 trillion. The huge subsidy will of course put enormous pressure on the state budget (APBN) because its share of total energy subsidy spending in 2022 will hit 47.4 percent and account for 5.7 percent of total government spending.
In addition, the consumption of subsidized LPG continues to climb, from 2.71 million metric tons (MT) to 8 million MT in 2022 while that of non-subsidized LPG trends downward from 0.98 million MT in 2013 to projected 0.58 million MT in 2022. This is due to the open distribution mechanism amid the price disparity between the subsidized and non-subsidized LPG. As a result, according to the survey by Statistics Indonesia (BPS), 47.9 percent of subsidized 3-kg LPG cylinders are actually taken up by the rich (those in the top four income deciles) as opposed to only 23.3 percent by the poor (those in the bottom four).