Government urged to delay power tariff increase

The commission VIII of the House of Representatives (DPR) has formally asked the government to delay the planned increase in electricity tariff for the last quarter of this year, Kompas reported on Friday.

The request was made on Thursday evening during a meeting between the commission members and the director general of electricity and energy utility, Luluk Sumiarso. The meeting had been suspended for several hours due to division over the planned tariff increase.

Agusman Effendi, the vice chairman of the commission, said that the increase in the electricity tariff for the last quarter of this year could be avoided because the strengthening of the rupiah against the U.S. dollar had significantly reduced state-owned electricity company PLN’s deficit.

"With the current rate of Rp 8,500 against the U.S. dollar, PLN's total loss has significantly declined to Rp 30 billion. This loss can be coped with an improvement in efficiency," he said.

In a bid to reduce its mounting financial deficit, the losing money PLN has been allowed to increase electricity tariffs by six percent per three months beginning January this year until the end of 2004. The next tariff increase is scheduled to take place in October.(*)