Electricity prices may be raised by 15-20 percent: Minister

The government has opted temporarily for an increase of electricity prices on an average of 15-20 percent in case of big industries and consumers who have above 1,300 volt electricity meters, the Kompas newspaper reported in its Thursday edition.

The increase will not be applicable for consumers as well as micro, small and medium industries who have below 1,300 volt meters.

This was revealed by Minister of Manpower and Transmigration Erman Soeparno after attending limited Cabinet coordinating meeting, which was chaired by Coordinating Minister of Economy Boediono at the Ministry of Finance building in Jakarta on Wednesday.

Erman immediately said the decision was not final yet because the government has still discuss it next week during the coordinating minister?s limited Cabinet meeting.

?With this (increase), there will be an additional electricity subsidy. During the meeting, there were several options but the minimum amount of Rp 7 trillion. This is in addition to the subsidy amount, which was already allocated in the 2006 State Budget (Rp 17 trillion). We opted for the minimum so that the increase will not be big,? Erman said.

Meanwhile, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that all the estimates are still in the form of government?s calculations and they can be changed. The final decision will be made after finalizing the basic costs of electricity supply through the government?s audit agency BPK.

?We are not in a position to tell about the decision that is sure and what kind of scenario. The key is the basic cost of electricity supply from the BPK,? Purnomo said.

Separately, the chairman of Indonesia?s Chamber of Commerce and Industry (KADIN) Muhammad S Hidayat has demanded the government to take a decision on the electricity prices before April 1, 2006. This certainty will facilitate businesspeople make their business plans in line with the government?s decision on the electricity prices.

The BPK?s audit was scheduled to be over on Feb. 22, 2006 and businesspeople hope that the government will take a decision as soon as possible.

Basically, Kadin opposes any increase of electricity prices. But it will open a dialog with the government to discuss the increase according to the capability of individual sectors after the announcement of the audit results of basic costs of electricity supply. (*)