Electricity tariff to increase by seven percent

Director General of Electricity and Energy Application Yogo Pratomo made it clear on Friday that the planned increase in the electricity tariff would not exceed seven percent, Koran Tempo reported on Saturday.

Yogo said that the state owned electricity company PLN needed to increase the electricity tariff to cope with the rise in the production cost as the result of the recent increase in the fuel prices.

According to him, the fuel price has caused an increase in the production cost by seven percent. "PLN, therefore needs to adjust its tariff to enable it break even. But the rise should not increase by seven percent," he added.

He said that the government had not yet received any proposal from PLN to increase the tariff but he estimated that the rise would begin affective in the middle of this year.

The spending for fuel accounts for about 25 percent of the PLN's total production, which reached about Rp 64 trillion last year. The increase in the fuel prices has caused an increase in the total production cost by seven percent. (*)