Unavoidable raise of international fuel prices had forced Government of Indonesia under the leadership of Susilo Bambang Yudhoyono (SBY) to reduce fuel subsidies. These happened in March 2005 (fuel prices increased approximately 60 per cent), October 2005 (with 108 per cent rise in fuel prices), and May 2008 (which increased the fuel prices for around 30 per cent). The point of this policy is that the government has intention to re-allocate the funds from reduced fuel subsidies to four main programs for poor people such as direct compensation (payment of 100,000 Indonesian Rupiah, or about US$10, to 15 million families, or one quarter of the population, through the state postal and banking system), school operational assistance, free health service, and rural infrastructure program. The objective of this study is to evaluate the Fuel Subsidy Reduction Compensation Program (Program Kompensasi Pengurangan Subsidi Bahan Bakar Minyak (PKPS-BBM)) during the period 2005-2006 in general. Quantitative and qualitative approaches are used in this research through document analysis and in-depth interview. PKPS BBM program implementation in Nusa Tenggara Barat, Kalimantan Timur, and Bogor City are not yet optimal because of the dissimilarity on number of target and standard of utilisation in each region, considering differences in their geographical conditions. However, poor people are quite satisfied with free health services although the realization did not touch the target completely. Moreover, there still exists expense charged to poor people.