Assessing the Feasibility of Migration Policy from LPG Stoves to Induction Stoves in Indonesia

Abstract

Energy subsidy is a common policy in developing countries to protect poor people. Yet, the policy can become a budget burden such as LPG subsidy for cooking in Indonesia, reaching US$ 3.9 billion in 2018. In this study, we analyze the feasibility of the induction program currently proposed the Ministry of Energy and Mineral Resources, and the State-owned Electricity Company. We use multiple approaches involving energy equivalence measurement, LPG consumption survey, input-output analysis, and feasibility analysis on both government and household perspective. Our analysis results that the policy can significantly reduce the energy cost for cooking on poorer households while relatively wealthy household undergoes higher energy costs for cooking because many of them are still using the subsidized LPG 3 kg cylinder. For them, the energy cost of the induction stove will be lower than the energy cost of the unsubsidized LPG 12 kg cylinder