Government calculating electricity tariff increase

The government is calculating the fair increase in the tariff of electricity for this year to cope with the rise in the operating costs of the state owned electricity company PLN .

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Tuesday that the increase in the electricity tariff would be based on the increase in PLN's fuel spending.

"A number of tariff increase scenarios are being made with different assumptions," the minister said.

PLN had said that it would be difficult for the company to cope with the surge in the production costs as the result of the fuel price increase, if there were no adjustment in the electricity tariffs. PLN has to buy part of its fuel needs at market prices because not all of the fuels used by the company were subsidized by the government.

PLN's needs for high speed diesel (HSD) oil and marine fuel oil (MFO) reaches about 9.1 million kiloliters a year. In October, PLN was required to buy HSD at Rp 4,740 per liter and MFO at Rp 2,100 per liter. The company expects that this year the price of HSD will increase to Rp 6,000 per liter and that of MFO will rise to Rp 3,800 per liter. (Godang)