February 5, 2025
JAKARTA – The government decided to walk back its abrupt decision to ban small retailers from selling 3-kilogram canisters of liquefied petroleum gas (LPG) after the policy caused shortages and long waiting lines across the country.
House of Representatives Deputy Speaker Sufmi Dasco Ahmad of President Prabowo Subianto‘s Gerindra Party stated that the president has instructed Energy and Mineral Resources Minister Bahlil Lahadalia to allow retailers to sell the 3-kg LPG canisters.
“In the meantime, the government will gradually register these retailers as official sub-distributors to ensure [compliance with the government’s price cap] and prevent LPG prices from becoming excessively high for the public,” he said in a statement on Tuesday.
Dasco also clarified that the policy to limit distribution of the 3-kg LPG canisters was not President Prabowo’s initiative, but that of the Energy and Mineral Resources Ministry. The President decided to intervene after receiving reports that the new sales regulation led to long queues as the public struggled to purchase the cooking gas, Kompas reported.
The Ministry set a sales limit on 3-kg canisters of the cooking gas to official distributors through a new regulation on Feb. 1, in a bid to tighten government oversight and targeted distribution.
Only households, microbusinesses, small farmers and small-scale fishermen are allowed to purchase the fuel. Eligible buyers must first register on a government website and present their ID at the point of sale.
Read also: House urges uninterrupted access to LPG subidy amid transition
The government also gave small retailers who meet the required standards a one-month period to register as official LPG distributors.
Chaotic implementation
Since the policy was implemented, however, long queues have formed outside approved LPG distributors across various regions, with thousands of residents expressing frustration over their struggle to obtain the cooking gas.
Many had to endure waits of up to five hours in the scorching sun or under the rain to purchase the subsidized fuel.
Read also: Pertamina raises LPG price, mulls hiking gasoline price
In South Tangerang, Banten, a 62-year-old small restaurant owner died in a hospital on Monday, reportedly from exhaustion after waiting in a long line to buy subsidized LPG at a distributor located some 500 meters from her home.
In another part of the city, tensions flared as people who were waiting in line engaged in heated arguments, fearing they would not be able to buy the cooking gas after hours of waiting.
In nearby Tangerang regency, also in Banten, some customers nearly came to blows with sellers, accusing them of hoarding the subsidized fuel after the sellers announced they had run out of stock.
Meanwhile, in Depok, West Java, massive crowds waiting to purchase subsidized LPG outside official distributors spilled into the streets, causing traffic jams and prompting police to intervene to alleviate congestion.
Some residents reported skipping work to secure the fuel, while street vendors revealed they had been unable to open their businesses for days because of difficulties obtaining the cooking gas.
Official distributors also reported receiving fewer 3-kg LPG canisters than usual since the policy was implemented.
Walk Back
Bahlil issued a public apology for the chaotic implementation of the new subsidized LPG distribution policy, emphasizing that the government’s intention was to improve the system.
“We apologize for what happened,” he said on Tuesday as quoted by Kompas.
He explained that the policy had been in the works since 2023 after the Supreme Audit Board (BPK) revealed that a lot of retailers were abusing the subsidy by selling the 3-kg LPG canisters at prices above than the government’s price cap.
Bahlil said that while the government had set a maximum price of Rp 19,000 (US1.16) for the subsidized fuel, most retailers had been selling them for around Rp 25,000.
In response to the new policy’s chaotic implementation, Bahlil stated that authorities decided to allow retailers to resume selling the subsidized LPG to prevent further disruptions to public access to the fuel.
However, these retailers will now be designated official sub-distributors and will be required to use an app developed by state-owned oil and gas company Pertamina to record every transaction. This system will help ensure compliance with the price cap and that only eligible buyers can purchase the subsidized LPG.
The government subsidizes about 70 percent of the price for 3-kg LPG canisters, spending approximately Rp 87 trillion last year to provide cooking gas to 40 million people.
For years, the government has been working to reduce the subsidy by ensuring that only low-income households and small businesses benefit from the subsidized LPG.