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Government to raise electricity tariff in 2020

Tempo - July 3, 2019

Vindry Florentin, Jakarta – The government plans to increase electricity tariffs for 12 non-subsidized groups starting in 2020. Thepolicy is expected to reduce the government's financial burden in the State Budget (APBN).

According to regulations, electricity tariff adjustments should be carried out every three months; referring to changes three production cost (BPP) components, which are the rupiah-to-US dollar exchange rate; inflation, and the Indonesian crude price (ICP).

However, since 2017, the government decided to postpone tariff adjustments.

"Until the end of this year, the electricity tariff will not change," the Energy Ministry's Director General of Electricity Rida Mulyana said on Tuesday, July 2.

As a consequence, Rida said, the government compensate PLN for the production cost. Last year, the amount was Rp23.17 trillion. Rida said compensation costs could be reduced by making tariff adjustments.

To help reduce the state budget's burden, the government will also reduce electricity subsidies by erasing subsidies for the 900 volt-ampere household group, which is estimated to save up to Rp6 trillion.

However, Rida said the government is being extremely careful in taking this decision, because there are 24 million customers currently enjoying the subsidy.

Source: https://en.tempo.co/read/1220747/govt-to-raise-electricity-tariff-in-2020