Indonesia: Govt Seeks to Delay Electricity Tariff Hike until Year End

• Jun 15, 2017

TEMPO.CO, Jakarta – Energy and Mineral Resources Minister Ignasius Jonan said the government will do their best to delay electricity tariff hike for all subscribers group until the end of the year. 

“The government is committed to keeping tariffs as they are today, until the end of this year. We are even trying to lower the tariffs, which is why we review and recalculate them every three months,” Jonan said in Depok, Thursday, June 15. 

According to Jonan, the government seeks to stabilize tariffs by, among others, improving PLN’s efficiency so that they can lower electricity sales price.

He also said that the process of terminating subsidies for the 900-VA subscribers group has been completed, so that there will be no more tariff hikes for households that require subsidies. 

“There are households that still receive subsidies; about 4.5 million of the 900-VA subscribers are eligible for subsidies—based on the data provided by the TNP2K (The National Team to Fast-track Poverty Alleviation). The 450-VA subscribers are also still receiving subsidies from the government,” he said. 

Jonan said the stopping of subsidies for households considered to be financially able to pay for power bills without subsidies was done to raise Indonesia’s electrification ratio.

The Energy Ministry’s records show that there are some 2,500 villages without electricity access and 10,000 other villages with insufficient electricity supplies.

“The money from the subsidy revocation will be used for them. If we can pay for it, we shouldn’t ask for subsidies,” he asserted.

He admits that the increase is a lot. With the subsidy, 900 VA subscribers only had to pay some Rp80,000 for their bills. Now they have to pay around Rp170,000.

“I understand that’s a high increase. But I don’t think that’s too much for people who can buy a mobile phone and pay for their service. The [subsidy] money is best allocated to people who actually need it, where there is no electricity in their hometowns,” he said.

Source: https://en.tempo.co/read/news/2017/06/15/056884838/Govt-Seeks-to-Delay-Electricity-Tariff-Hike-until-Year-End