Government may soon cut electricity tariff

The government may soon cut the electricity tariff both for households and industrial users as part of the stimulus economic package to help cope with the impact of the world?s economic crisis, Investor Daily reported on Monday.

?We have not decided the percentage of the electricity tariff cut, but for sure there is a possibility for the government to reduce the power tariff,? Minister of Energy and Mineral Resources Purnomo Yusgiantoro was quoted as saying by the newspaper.

The proposal to cut the electricity tariff was raised during a meeting between the Indonesian Chamber of Commerce and Industry (Kadin) with the acting Coordinating Minister for the Economy Sri Mulyani in Jakarta on Thursday.

In the meeting, Kadin suggested the government to provide additional subsidy to state-owned electricity company PLN to enable it to cut the electricity tariff. According to Kadin, the cut in the electricity tariff is needed as part of the economic stimulus package to help the business community and industries cope with the impact of the world?s economic crisis.

Separately, Harry Azar Aziz, the vice chairman of the House?s state budget committee, said with the fall in the prices of oil-based fuel, which account for between 30 and 40 percent of power generation costs, PLN could save between 6 and 8 percent.

?With the lower production costs, PLN should be able to reduce electricity costs by between 15 and 25 percent,? Harry said. (*)