National oil companies and fossil fuel subsidy regimes in transition: The case of Indonesia

• Presents a framework for analysing the role of national oil companies (NOCs) in fossil fuel subsidy regimes as exports fall. Applies to case Indonesia. Shows ability NOC absorb and obfuscate costs subsidies erodes revenues from upstream production declines. that political lock-in regime is more difficult overcome. Proposes complementary reform agenda reform. It has long been recognised offer means funding delivering politically valuable good. But what happens when begins run out? Fiscal pressures will clearly increase, but there also evidence net importers with NOCs are still likely have than those without. A key question about countries moving through this transition therefore whether how changes classic logic erodes. We examine these issues detailed study Indonesia, which became importer early 2000s. series partial reforms FFS followed, remain plays central their delivery. find certain functions NOC, such obfuscating fiscal cost subsidies, eroded. increasing pressure not so far overcome institutional inertia NOC. Fundamental remains unlikely short term, separating downstream businesses changing its governance could help support