Revisiting fuel subsidies in Indonesia using k-means, PAM, and CLARA

Abstract

Indonesia is one of the countries in the world that still applies subsidies for fuel oil. By the law, the Indonesian government must ensure the supply and distribution of fuel for all Indonesian people. To implement this policy properly, understanding the pattern of fuel consumption is fundamental. In this study, clustering will be used to determine the categories of districts and cities based on subsidized fuel consumption patterns. Our research used several methods to compare which cluster method is the most optimal; the methods include k-means, Partitioning Around Medoids (PAM), and Clustering Large Applications (CLARA). The results show that k-means is the best clustering method with the highest Dunn index and Silhouette coefficient compared to others. The optimum cluster number we get is two and represents fuel consumption from several districts and cities. Some districts and cities had under-average consumption and needed to be monitored