Image: vanguardngr Berita 24 English - For the first time in five years, Indonesia's state power provider, Perusahaan Listrik Negara (PL...
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| Image: vanguardngr |
Berita 24 English - For the first time in five years, Indonesia's state power provider, Perusahaan Listrik Negara (PLN), will raise some electricity tariffs significantly, as rising global energy prices put a strain on the budget in a country where power is subsidised.
Rida Mulyana, a senior energy ministry official, announced on Monday that tariffs will increase on July 1, including for families with a capacity of 3,500 volt-ampere or more.
Only middle- and upper-income households, as well as government buildings, would be affected by the tariff hike, which Rida predicted would raise Indonesia's inflation rate by 0.019 percentage points by 2022.
Darmawan Prasodjo, the utility's chief executive, said the adjustment would affect around 2.5 percent of PLN's customers, but that pricing for enterprises and industries would not be affected.
Tariffs for households with a power capacity of 3,500 volt-amperes or more would be raised by 17.6% per kilowatt-hour, while tariffs for government buildings would be raised by 17.6% to 36.6 percent, depending on the type of the facility, according to Rida.
According to Bank Mandiri economist Faisal Rachman, such an increase in inflation will have little impact on the economy as a whole. The choice to maintain constant pricing for industries was "right," according to Faisal, because those clients had already paid relatively hefty tariffs.
The increase in electricity prices will also be "very useful" to the government, despite the fact that the energy subsidy burden remains high, he said.
PLN anticipated that for every $1 increase in Indonesia's crude oil price, the cost of generating power would rise by roughly 500 billion rupiah ($34.11 million), affecting the amount of government subsidies.
Last month, Indonesia's parliament accepted a government request to increase energy subsidies by $23.8 billion in 2022 in order to keep some energy costs stable in the face of global inflation.
(1 rupiah = 14,660.0000)
