Providing cleaner energy access in Indonesia through the megaproject of kerosene conversion to LPG

Abstract

In 2007 Indonesia undertook a massive energy program to convert its primary cooking fuel from kerosene to LPG in more than 50 million households. This megaproject, to be completed in late 2011, provided an improved household cooking fuel, with its associated benefits in user costs, cleanliness, convenience, and environment, and reduced the government's huge subsidy for petroleum fuels. Presented from the perspective of Pertamina, Indonesia's sole NOC, and the program implementer, this paper describes the background of the fuels situation, the planning stages, including the preparatory analytical work, targeted market surveys and tests, and the subsequent building of the financial, technical, and institutional models for carrying out the program on an expeditious schedule. It presents the project's major execution steps, results of the program to date, and the unique institutional roles of each party, including the activities and benefits for the government, Pertamina, the public, the industry, and the crucial agents in the fuel supply chains. Finally there is a retrospective policy analysis and a discussion of key factors and challenges in the execution of Indonesia's largest-ever energy initiative to provide improved cooking fuel.