The Indonesian President’s announcement that the government is going to encourage households to switch from liquid petroleum gas (LPG) to induction stoves for cooking is welcome. Trump and Netanyahu’s decision to wage war on Iran is causing economic chaos around the world. Already LPG prices on global markets have surged. Since the price of LPG for Indonesian households has long been fixed far below world prices, this is causing immense strain on the government’s budget. Even before the war, the government was planning on spending more than IDR 80 trillion (USD 4.7 billion) each year on LPG subsidies. The President’s desire to see a switch to induction stoves is not only motivated by his desire for a green energy transition – he is trying to stem the bleeding from the government’s budget.

Yet the reason why the government’s subsidy budget is so high is not the war in the Middle East. It is because this government, like all governments for the last 20 years, has failed to grasp the nettle of LPG subsidy reform. In particular, subsidized 3kg LPG cannisters marked ‘hanya untuk masyarakan miskin’ have been available for all households since they were introduced in 2007. A recent report from the International Institute for Sustainable Development (IISD) shows that 57% of subsidized LPG is used by households who are not even in the bottom 40% of the poorest households in the country; in other words, most of the subsidy goes to Indonesia’s middle classes and the better off, including more than 7 million of Indonesia’s richest 10% of households.

Numerous proposals for better targeting the subsidy have been made over the years, but none have ever been implemented out of fear of the backlash from middle-class voters who would have to pay higher prices for LPG. Similarly, after a successful pilot of induction stoves with 2000 households in Bali and Central Java, the Jokowi administration proposed in 2024 a major expansion of the programme to one million households. But, as the election approached, this policy was rapidly reversed, in part due to opposition from one of the Presidential candidates at the time, Prabowo Subianto. 

Yet, the simple reality is that the country can no longer afford to subsidize LPG for wealthy Indonesians. IISD calculates that targeting subsidized LPG to the bottom 60% of the population (which would ensure that most of the middle class still retain access) would save IDR 7.61 trillion each year (USD 459 million). Targeting it to the bottom 40% (still many more than ‘only the poor’) would save IDR 11.87 trillion (USD 717 million). These are resources that are needed now to support the households hardest hit by Trump’s war in the Middle East. 

Moreover, removing subsidized LPG from the best off will automatically trigger a rapid switch to the use of induction stoves. Cooking with electricity is far cheaper than cooking with unsubsidized LPG, even for those on the highest electricity tariff. However, induction stoves require power. Fewer than 17% of Indonesian households have an electricity connection of 1300 VA or more – the level needed to operate an induction stove – and most of these are better-off households. To ensure that middle-class Indonesians can still afford to cook, the government should use some of the savings from targeting LPG subsidies to subsidize connection upgrades as well as supporting access to induction stoves and the ferrous cooking utensils needed. 

If the President is serious about enhancing energy security, he should remove LPG subsidies for the best off and use the resources to facilitate a rapid transition to induction stoves. If, in 2029, 90% of Indonesians are using homegrown electricity for cooking, they – and Indonesia – will be far better protected from the next set of unpredictable global events.

This blog was published on 2nd April 2026 as an OpEd in the Jakarta Post (behind a paywall).