Qualitative System Dynamics Analysis of LPG Subsidy Reform and Urban Gas Infrastructure Development

Indonesia’s shift from liquefied petroleum gas (LPG) to city gas represents a vital move toward cleaner energy and long-term fiscal health, yet faces obstacles such as disjointed policies, limited infrastructure, and persistent user habits. This study adopts a qualitative system dynamics method to build a comprehensive view of the transition through a validated Causal Loop Diagram (CLD) encompassing three key areas: (1) subsidy policy, (2) consumer behavior, and (3) infrastructure development. The CLD of subsidy policy shows that price incentives alone are ineffective without synchronized infrastructure readiness and well-timed policies. The CLD of consumer behavior underscores the role of service quality, reliability, and satisfaction in maintaining adoption. Meanwhile, the CLD of system growth identifies technical, regulatory, and financial factors that influence the speed and fairness of infrastructure development. A combined CLD demonstrates how these areas interact - revealing, for instance, how pricing strategies impact user trust and behavior, or how satisfaction drives future demand. These findings highlight the need for integrated, rather than piecemeal, policy actions. The study proposes phased reforms in subsidies aligned with infrastructure rollout, improved residential access, and strategic public funding to accelerate city gas adoption. Although qualitative, the model offers a strong base for future simulations, policy experimentation, and deeper exploration of behavioral and institutional dynamics in Indonesia’s energy shift.