"Indonesia's Government Fails to Compensate Fertilizer SOE for Unpaid Subsidies"
In a recent disclosure, state-owned fertilizer producer PT Pupuk Indonesia revealed that the Indonesian government owes a staggering Rp 12.46 trillion (US$76.5 million) in outstanding fertilizer subsidy payments dating back to 2020. This delayed compensation includes substantial amounts from previous years, with last year's payable amounting to Rp 9.8 trillion, still pending due to ongoing audits by the Supreme Audit Agency (BPK).
Ongoing Audits Delay Payment
House Commission IV, responsible for overseeing agriculture and forestry, was briefed on the unresolved subsidy payments by Pupuk Indonesia. The company highlighted the pending Rp 430 billion from 2020 and Rp 189.2 billion from 2022, both currently under review by the BPK and the Agriculture Ministry’s inspectorate general.
Current Year's Outstanding Debt
The government's outstanding debt to Pupuk Indonesia continued to rise in 2024, with Rp 1.9 trillion still unpaid for the first four months of the year. CEO Rahmad Pribadi reported that the company had distributed 9.5 million tonnes of subsidized fertilizer in 2024, achieving 29 percent of the distribution target in the first half of the year.
Challenges in Subsidized Fertilizer Distribution
Rahmad noted the challenges faced by Pupuk Indonesia in distributing subsidized fertilizer, citing delays in the administrative process at the regency and district levels. Detailed allotments for recipients are crucial from these local administrations, impacting the timely delivery of subsidized fertilizer to farmers in need."