Electric stoves and motorcycle conversion return in the 2027 energy budget with the incentive under review

The Ministry of Energy and Mineral Resources brought its 2027 budget before Commission XII of the House of Representatives on 31 August 2026. The proposed ceiling is Rp27.33 trillion, an increase of 26.1 percent on the Rp21.67 trillion allocated for 2026.

The headline distribution is weighted toward supply. The Directorate General of Oil and Natural Gas takes the largest share at around Rp11.3 trillion, with sources giving Rp11.32 trillion and Rp11.35 trillion. The Directorate General of Electricity follows at Rp10.46 trillion. The Directorate General of New and Renewable Energy and Energy Conservation, known as EBTKE, receives about Rp1.8 trillion. Minerals and Coal receives Rp702 billion.

By composition, roughly 82 percent of the total goes to strategic programmes and infrastructure. Sources give that figure as Rp22.48 trillion and Rp22.51 trillion. Non physical public activity takes Rp1.3 trillion, or 5 percent, and operations take Rp3.56 trillion, or 13 percent.

The demand side lines are the ones worth reading

Most of the budget buys supply. A smaller set of lines buys changes in how energy is used, and those are the ones that bear on efficiency.

Electric stove procurement receives Rp815.59 billion, with one source recording Rp815.56 billion. Converting petrol motorcycles to electric receives Rp635.24 billion and targets 63,000 units. Three micro hydro installations across 2027 and 2028 receive Rp58.58 billion. These sit within a strategic infrastructure allocation of about Rp1.509 trillion under EBTKE.

A separate and smaller line provides 4,000 electric stove conversion kits for farmers at Rp158.5 billion, which is distinct from the main stove procurement figure.

The rationale Minister Bahlil Lahadalia gave for the stove programme is diversification away from imported liquefied petroleum gas. That framing connects these lines directly to the subsidy arithmetic elsewhere in the budget, where 3 kilogram LPG accounts for Rp114.1 trillion in the 2027 draft. A household cooking on electricity is a household not drawing on a subsidised cylinder.

Why the conversion programme is returning with its design under review

The motorcycle conversion line is the more interesting of the two, because it is a restart rather than a continuation.

The earlier programme offered a government subsidy of Rp10 million per unit against a total conversion cost of about Rp15 million, leaving the owner to find the remaining Rp5 million. It did not reach expected adoption through 2024. The structure also drew on corporate social responsibility funding, with companies directing CSR money toward conversions receiving non fiscal recognition through additional scoring in the government's Proper corporate performance rating.

A Rp5 million gap on a Rp15 million conversion is not a small ask of a household that owns a motorcycle because it could not afford a car.

Eniya Listiani Dewi, Director General of New and Renewable Energy and Energy Conservation, has said she is studying whether the coming programme will use the same concept or a new mechanism. The review draws in the Ministry of Science and Technology along with academics from ITB and ITS.

That willingness to reopen the design rather than simply refund the previous one is the most encouraging detail in this part of the budget. A programme that underperformed and is repeated unchanged tends to underperform again.

The conversion case is also stronger than it first appears, because the arithmetic has been moving in its favour. A converted motorcycle removes a daily petrol purchase and replaces it with electricity charged largely at home, where the tariff has held steady through 2026. Battery costs have fallen across the period the earlier programme ran. The barrier was never whether conversion pays back over the life of the vehicle. It was whether the owner could find the money on the day of conversion, which is a financing problem rather than an economic one.

What the rest of the priority list contains

The conversion lines sit alongside considerably larger commitments. Village electricity receives Rp9.7 trillion across 3,155 locations. Household gas network expansion receives Rp5.2 trillion for 959,232 connections. The Dumai to Sei Mangkei gas pipeline receives Rp3.9 trillion.

The contrast in scale is worth stating plainly rather than treating as a criticism. Extending electricity and gas connections to households that lack them is a different kind of obligation from improving the efficiency of households already connected, and the first has a stronger claim on public money. The point is simply that demand side conversion is currently a small share of a budget that is growing quickly, which means the conversion lines have room to expand if the redesigned mechanism performs.

There is also a sequencing relationship between these lines that is easy to miss. The village electricity and gas network programmes create the connections that conversion programmes later depend on. A household cannot switch to an electric stove without a reliable supply capable of carrying the load, and the 3,155 village electricity locations funded for 2027 are where that capability is being installed. Efficiency programmes that arrive a few years behind connection programmes are not late. They are following the only order in which the work can be done.

Sirkularium's read for government and public institutions

Three observations follow.

The first concerns how the gap is closed. The earlier conversion scheme failed at the point where the household had to contribute Rp5 million in cash. Mechanisms that move that cost off the household balance sheet tend to succeed where grants alone do not, whether through instalments recovered on an electricity bill, fleet level procurement by employers or cooperatives, or lease arrangements where the battery is not owned outright. The review now underway is the moment to test those structures rather than to adjust the grant figure.

The second concerns choosing where conversion happens first. Sixty three thousand units is a modest national number but a substantial one if concentrated. Riders who cover high daily distances, such as delivery and ride hailing workers, reach the point where fuel savings repay a conversion far sooner than occasional riders do. Targeting high utilisation fleets would produce faster paybacks, clearer demonstration effects and better data on real world performance than a thinly spread national allocation.

The third concerns treating stoves and motorcycles as one policy rather than two. Both substitute electricity for imported fuel at the point of use. Both reduce a subsidised fuel volume. Both depend on the same distribution network and on the same household decision about upfront cost. Presenting them as a combined demand side programme, with a single target for imported fuel displaced, would make their contribution legible against the subsidy line in a way that separate procurement figures do not.

What to watch next is the mechanism Eniya's review settles on, whether the DPR deliberations preserve the conversion allocations intact, and whether the 2027 programme publishes conversion completions rather than only budget absorption.