When the safety net becomes a paywall: the argument for reforming Indonesia’s fuel subsidy system

Picture of Salsabilah Shafa

Salsabilah Shafa

Law and Technology LL.M (Cand.), Tilburg University

Fuel subsidies were supposed to cushion Indonesia’s poor, not demand that they own a data plan. Yet since 2022, Indonesia has implemented a new policy requiring citizens  who want to access subsidized Pertalite petrol or Solar diesel must first enrol in the MyPertamina app and present a QR code at the pump. In a country where roughly 30 % of citizens—about 85 million people—are still offline, digitising subsidies risks turning the safety-net itself into a paywall.

Fuel subsidies in Indonesia are huge: the 2024 state budget set aside IDR 335 trillion (≈ US$22 billion) for energy support, a sum bigger than the entire higher-education budget.  Politicians argue that middle-class motorists abuse the discount, so eligibility has to be “targeted.” The chosen tool is MyPertamina: drivers upload their national-ID data, vehicle papers and a selfie; Pertamina validates the file and issues a personal QR code. Pumps will dispense subsidised fuel only after the code is scanned.

Officials laud the system as “accurate subsidy distribution”, claiming that 12 million vehicles have already been registered and around 85 % of stations are equipped with scanners. On paper the model enforces Presidential Decree 191/2014 and BPH Migas quota rules automatically. In practice it turns every litre of subsidised fuel into what scholars call digital public infrastructure (DPI)—a state service that lives behind a screen.

This means there is a bandwidth barrier for many Indonesians to accessing subsidies for the fuel they need. 

World Bank figures put Indonesian internet penetration at about 69 % in 2023; the unconnected are overwhelmingly rural, low-income, older and less educated. Eastern provinces such as Maluku and Papua still struggle with patchy 3G signals, leaving pumps there unable to validate QR codes reliably. Drivers have reported paying full market price, borrowing friends’ codes, or abandoning Pertamina stations altogether—outcomes that undercut the policy’s anti-fraud goal.

There is similarly a problem with access depending on types of vehicle:  During rollout only four-wheeled vehicles were invited to register, excluding motorcycle taxis (ojeks) that form the backbone of informal transport and delivery work. For many of these riders, an entry-level smartphone or constant data bundle is an unaffordable luxury; fuel suddenly became so too.

This makes  Indonesia’s fuel subsidy system a data trove with thin guardrails. The registration process harvests biometric selfies, full identity card details (address, religion), licence-plate numbers and location-stamped fuelling logs. Under Indonesia’s 2022 Personal Data Protection Law, selfies are sensitive data, triggering obligations of purpose limitation and strict security. But Pertamina has released no privacy-impact assessment, and Kominfo has yet to issue technical standards. In short, a national mobility database is being built with no independent oversight—contradicting the very DPI principles that civil-society groups champion.

Other countries in the region, meanwhile, target fuel subsidies without involving smartphones:

  • Malaysia runs the Subsidised Diesel Control System (SDCS): eligible truckers apply online but receive a chip-embedded fleet card that they swipe at any pump. No smartphone, no selfie.
  • Thailand layered a five-baht-per-litre discount onto its State Welfare card for motorcycle-taxi drivers during the 2022 energy crunch, again sidestepping blanket phone rules.

Both models show that offline tokens plus simple identity checks can achieve quota control without erecting a digital barrier.

How, then, should digital subsidies be designed to include everyone?

Global DPI research converges on three guard-rails: collect only data you truly need, offer offline routes, and put a neutral steward between citizens and the server. To ensure equitable access to subsidized fuel and safeguard data privacy, Indonesia should therefore make the following policy changes:

  1. Offline tokens for the offline public
    Distribute free smartcards or printed QR vouchers linked to vehicle plates through village offices and licensing centres. Pumps embrace both tokens and the app, so no citizen is locked out by bandwidth.
  2. Establish a “Fuel Data Trust”
    A multi-stakeholder board—Pertamina, BPH Migas, Kominfo, academia, and consumer/privacy NGOs—would audit algorithms, publish equity dashboards and certify data-deletion policies.
  3. Run annual equity audits
    Release anonymised fuelling statistics disaggregated by province, income, gender and age. If data show rural uptake lagging, deploy mobile enrolment units or extend card quotas.
  4. Enforce the PDP Law in spirit and letter
    Appoint an independent Data Protection Officer; offer granular consent screens; purge biometrics once eligibility is verified; and encrypt fuelling logs at rest.
  5. Design for low bandwidth
    Allow pumps to validate tokens offline and sync later, much as payment terminals batch-upload transactions when networks return.

In this case, reform beats repeal. Critics might argue for scrapping the digital layer altogether, but the subsidies must indeed be targeted—Indonesia’s fiscal space is tightening, and fossil-fuel spending crowds out health and education. A smarter design is cheaper than a policy U-turn: cards cost cents, databases cost billions. By inserting offline options and robust data governance, the state can still reap fraud-prevention gains while honouring welfare rights.

In the end, bandwidth should not dictate welfare. Subsidies are meant to protect the vulnerable, not penalise poverty of connectivity. Indonesia’s QR experiment is a pivotal test of whether digital public infrastructure can widen, rather than narrow, access to essential services. Add the offline rails, build an independent stewardship body, and enforce data-minimisation—then MyPertamina could evolve from a gatekeeper into a genuine public-good platform. Absent those fixes, the policy risks entrenching a new fault-line: one separating the data-rich from the fuel-poor.

About the project

Places and populations that were previously digitally invisible are now part of a ‘data revolution’ that is being hailed as a transformative tool for human and economic development. Yet this unprecedented expansion of the power to digitally monitor, sort, and intervene is not well connected to the idea of social justice, nor is there a clear concept of how broader access to the benefits of data technologies can be achieved without amplifying misrepresentation, discrimination, and power asymmetries.

We therefore need a new framework for data justice integrating data privacy, non-discrimination, and non-use of data technologies into the same framework as positive freedoms such as representation and access to data. This project will research the lived experience of data technologies in high- and low-income countries worldwide, seeking to understand people’s basic needs with regard to these technologies. We will also seek the perspectives of civil society organisations, technology companies, and policymakers.