Government delays plan to revoke electricity subsidy

The government has decided to delay plan to revoke electricity subsidy for millions of low income consumers after President Joko Widodo instructed the cabinet during a meeting on Wednesday to recalculate the plan and update the existing data on the country?s poor population.

The government initially planned to start early next year revoking the subsidy by increasing the power tariff of consumers subscribing to power capacity of 450 VA and 900 VA, which are still subsidized. The plan comes after electricity subsidy in the 2016 state budget has been drastically reduced to Rp 38.39 trillion from Rp 73.15 trillion in the 2015 state budget.

There are currently some 44 million households subscribing to the 450/900 VA power capacity. The government has said that many of the household consumers in this category are no longer eligible to the power subsidy. According to the initial plan, only about 24.7 million households are still eligible for the subsidy as they?re considered as poor income category.

However, the data is based on the statistics provided by the National Team for the Eradication of Poverty, which needs to be updated as it was issued in 2011.

Minister of Energy and Mineral Resources Sudirman Said stated that it would take about six months to complete the data reconciliation process. (*)