Assessing the Sustainability of Liquefied Petroleum Gas Subsidy Policies: Evidence from Cirebon City, West Java, Indonesia

Abstract

Liquefied Petroleum Gas (LPG) subsidies have become an important policy instrument for improving energy affordability, reducing energy poverty, and supporting economic activities among vulnerable populations in Indonesia. However, the long-term sustainability of LPG subsidy policies remains a subject of debate due to concerns regarding fiscal burdens, governance challenges, and environmental impacts. This study aims to assess the sustainability of LPG subsidy policies through a case study in Cirebon City, West Java, Indonesia, using the Triple Bottom Line framework that integrates social, economic, and environmental dimensions. A qualitative case study approach was employed, utilizing semi-structured interviews, Focus Group Discussions (FGDs), field observations, and document analysis involving key stakeholders, including government agencies, Pertamina, LPG distributors, micro-enterprises, and household beneficiaries. Data were analyzed using thematic analysis. The findings indicate that LPG subsidies contribute positively to social sustainability by improving energy access, reducing household energy expenditures, and enhancing social welfare. The policy also supports economic sustainability through increased purchasing power, improved productivity of micro, small, and medium enterprises (MSMEs), and local economic resilience. From an environmental perspective, LPG subsidies help reduce dependence on traditional fuels such as firewood and kerosene, thereby contributing to cleaner household energy use and indirectly supporting forest conservation. The study identifies significant challenges related to mistargeting, distribution leakages, fiscal pressures, and continued dependence on fossil fuels, which may hinder long-term sustainability and energy transition efforts. The findings suggest that LPG should be positioned as a transition fuel rather than a permanent energy solution. Strengthening subsidy-targeting mechanisms, improving digital governance systems, enhancing fiscal efficiency, and gradually promoting renewable energy adoption are essential to support sustainable energy governance and the achievement of Sustainable Development Goals (SDGs). This study contributes to the literature by providing an integrated sustainability assessment of LPG subsidy policies within the context of developing countries.

The authors' abstract, as published at the source. Sustainability, 2026 · DOI ↗