Of course no one can answer the above question without some basic knowledge about indulgences, the Treasury of the Church and the Holy Father’s power of binding and loosing authority.
This post is a short summary of the Catholic Encyclopedia INDULGENSES:
An indulgence is REMISSION of the TEMPORAL PUNISHMENT due in God’s justice, to sin that has been forgiven, which remission is granted by the Church in the exercise of the power of the keys, through the application of the superabundant merits of Christ on the cross.
An indulgence can be PLENARY or PARTIAL.
A plenary indulgence expiates ALL temporal punishment for sin.
A partial indulgence expiates a PART of the temporal punishment for sin.
BASIS OF THE DOCTRINE OF INDULGENCE
An essential element in indulgences is the application to one person (sinner/penitent) of the satisfaction performed by another (performed by Christ on the cross for the sins of the whole world).
This above one of the most important keys to understand indulgences.
If we as sinners would be able to pay to God the father directly (bypassing Christ’s merit on the cross) the reparation/satisfaction for our sins by our own merit, Christ wouldn’t have to die to pay the reparation for our sins and the Church’s Treasury would be meaningless because we wouldn’t need it.
THE TREASURY OF THE CHURCH
Christ, as St. John declares in his First Epistle 2:2, “He Himself is the propitiation for our sins: and not for ours only, but also for the whole world.”
Since the satisfaction of Christ is infinite, it constitutes an inexhaustible fund which is MORE THAN SUFFICIENT to cover the indebtedness of the whole world contracted by sin.
The Church herself is not the absolute owner, but simply the administratrix, of the superabundant merits of Christ on the cross WHICH THE TREASURY OF THE CHURCH CONTAINS.
This treasure entrusted to Blessed Peter, the key-bearer, and his successors, that they might, for just and reasonable causes, DISTRIBUTE IT TO THE FAITHFUL in full or in partial remission of the temporal punishment due to sin.
An indulgence is obtained through the Church who, by virtue of the power of binding and loosing (which power has no restriction), intervenes in favor of individual Christians and opens for them the Church’s Treasury to obtain Christ’s merit on the cross to expiate the temporal punishments due for sins.
To put it simply:
Indulgence places at the penitent’s disposal THE MERITS OF CHRIST ON THE CROSS, form the "Treasury of the Church."
An indulgence is valid both in the tribunal of the Church and in the tribunal of God.
This means: Releases the penitent from his indebtedness to God by releases from the temporal punishment.
In granting an indulgence, the grantor (pope or bishop) does not offer his personal merits in lieu of what God demands from the sinner.
In applying them, she keeps in view both the design of God’s mercy and the demands of God’s justice.
She therefore determines the amount of each concession, as well as the conditions which the penitent must fulfill if he would gain the indulgence.