Indonesians Must Show ID Cards to Purchase 3kg LPG Cylinders Starting June 1

Beginning June 1, 2024, Indonesians will need to present their Resident Identification Card (KTP) when buying 3kg LPG cylinders. This new policy, introduced by PT Pertamina Patra Niaga, aims to ensure that subsidized LPG distribution is properly targeted.

Riva Siahaan, Director of PT Pertamina Patra Niaga, stated, "On June 1, when you buy LPG 3kg, you must use an ID card so that all representatives and facilities go there to collect data about customers who buy and register it in what is called the customer's software or MAP." The initiative is part of a broader effort to map out consumers who purchase subsidized LPG and to prevent misuse.

Why this matters: This new policy has significant implications for Indonesia's energy sector and subsidy distribution. Proper targeting of subsidies can lead to more efficient use of resources and improved living standards for low-income households.

As of April 2024, approximately 41.8 million National Identity Numbers (NIK) have registered for LPG subsidies. The majority of these registrations, around 86%, are from the household sector. Other sectors include micro businesses, farmers, fishermen, and retailers.

The Minister of Energy and Mineral Resources, Arifin Tasrif, emphasized the importance of restricting the purchase of subsidized LPG to registered individuals. He noted that the government is currently conducting buyer registration and will only allow registered individuals to purchase 3kg LPG cylinders starting in June 2024.

Data from Pertamina shows that most buyers of subsidized 3kg LPG cylinders come from lower-income groups (desil 1-7), but there are also buyers from higher-income groups (desil 10) who purchase these cylinders. This discrepancy highlights the need for tighter control and proper targeting of subsidies.

According to Pertamina, there are currently 253,365 active distribution points, with 98.8% having recorded at least one transaction in March 2024. Additionally, 88% of these points have recorded 100% of their transactions. This data collection is essential for the successful implementation of the new policy.

The government plans to shift from an open distribution system to a closed one, where only registered low-income households can access subsidized LPG cylinders. This change aims to improve efficiency and ensure that subsidies reach those who need them most.

Despite some criticism from lawmakers who argue that the program does not address the root problem of inefficient distribution and price disparities, the government remains committed to the new policy. Pertamina's Director, Nicke Widyawati, acknowledged public complaints but stressed the importance of accurate data collection.

This new requirement for showing ID cards when purchasing 3kg LPG cylinders represents a significant step in ensuring that subsidies are properly targeted. By collecting and analyzing consumer data, the government aims to prevent misuse and ensure that low-income households benefit from the subsidies.

Key Takeaways

• As of June 1, 2024, Indonesians must show their Resident ID Card (KTP) to buy 3kg LPG cylinders.
• The policy aims to ensure subsidized LPG distribution is properly targeted to low-income households.
• 41.8 million National Identity Numbers (NIK) have registered for LPG subsidies, mostly from the household sector.
• The government is shifting from an open to a closed distribution system to improve efficiency and prevent misuse.
• Accurate data collection is crucial to prevent misuse and ensure subsidies reach those who need them most.