The first identifies and estimates subsidies to Indonesia's upstream oil industry, while the second report analyses lessons that can be learned from Indonesia's previous experience with reforming fuel subsidies for consumers.

The GSI, along with the research team, will present the key findings of "Fossil Fuels - At What Cost" at an official launch event in Jakarta on Wednesday 24th November. The launch will include a presentation by leading experts on how the issues raised in the report relate to challenges facing the upstream oil and gas sector today. The invitation and registration form are attached here (please note the GSI will not be funding participants travel for the event).

Fossil Fuels: At What Cost? Government support for upstream oil and gas activities in Indonesia

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The GSI's first report in the series "Fossil Fuels - At What Cost?" studies the subsidies provided to fossil-fuel producers in Indonesia. The study provides in-depth analysis of Indonesia's system of Production Sharing Contracts and other relevant policies to identify and estimate government support for the industry. The study concludes that three subsidies can clearly be identified, totalling US$ 1.8 billion in 2008. It estimates that this is a lower-bound figure, as at least seven other potential subsidies were identified that could not be assessed or quantified based on the available information. The researchers recommend that further work could usefully undertake a full assessment of the economic, environmental and social impacts of these subsidies in order to inform a public debate on whether the subsidies should be kept or considered for reform.

Lessons learned from Indonesia's attempts to reform fossil-fuel subsidies

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Part of the GSI's series of "Lessons Learned" case studies of attempt to reform subsidies in Brazil, France, Ghana, India, Poland and Senegal. This report reviews the history of fuel subsidies in the country and focuses on the performance of two policies that have been used to support reform. The first is the Bantuan Langsun Tunai (BLT), an unconditional cash transfer program used to help cushion low-income households from price increases in 2005 and 2008. The second program, begun in 2007, aims to make low-income households use liquefied petroleum gas (LPG) instead of kerosene, as it is cheaper to subsidize, cleaner and more efficient. The report concludes that both these policies appear to have contributed towards the Indonesian government's reform objectives.