Government won’t increase electricity tariff for low income households

The Ministry of Energy and Mineral Resources ensures that electricity consumers falling in the category of low income households (with installed capacity of 900 VA) will not be applied with the new electricity tariff adjustment policy next year.

This means that while other power consumer categories will see their tariff adjusted in every three months, starting next year, which may result in higher tariff if the component factors affecting the tariff dictates so, the tariff for the 900 VA consumer category will not rise.

Minister of Energy and Mineral Resources Arifin Tasrif said that the government will maintain the electricity subsidy for the 900 VA consumer group.

Read also: Electricity ratio rises to 98.86% at end Q3

Arifin said that the ministry is currently waiting for latest verification made by state-owned electricity firm PT PLN on the total number of consumers falling the 900 VA category.

According to PLN data, as per 31 October 2019, the total number of the 900 VA consumers is recorded at 22.1 million households.  For next year, the number is projected to increase to 24.4 million.

The government plans to start implementing the power tariff adjustment policy next year.  The tariff will be adjusted in every three months taking into account four component factors including oil price (Indonesia Crude Price), coal price (government coal reference price), exchange rate of the rupiah against the US dollar, and inflation rate.  It is for the first time that the government includes coal as one of the determining factors of electricity tariff.  

If coal price continues to decline next year, there’s possibility for the electricity tariff to also decline, said Director General of Electricity at the ministry, Rida Mulyana said.

Editing by Reiner Simanjuntak