Govt cuts fuel prices and electricity tariffs

The government has finally decided to cut prices of subsidized Premium gasoline and diesel as well as electricity tariffs beginning January 15 (Wednesday) as part of the government?s economic stimulus packages.

The prices of the Premium gasoline and diesel will be lowered by Rp 500 per liter to Rp 300 to Rp 4,500 per liter (1US$= Rp 11,170), respectively. Meanwhile, the electricity tariffs for businesses will be reduced by about 20 percent to Rp 1,023 per kWh from Rp 1,238 pr kWh at present.

The government?s decision to cut fuel prices and electricity tariffs was announced by President Susilo Bambang Yudhoyono at the State Palace in Jakarta on Monday. The President said that the fuel prices and electricity tariffs reduction was needed to cope with the impact of the world?s economic crisis.

Speaking to journalists at her office following the announcement, the acting Coordinating Minister for the Economy Sri Mulyani said that the cut in the fuel prices and the electricity tariffs would help ease inflationary pressure as well as help the local industries cope with the impact of the world?s deepening economic crisis.

Sri Mulyani said that the cut in the fuel prices was also made to keep with the fall in prices of crude oil in the oil market. At a price of Rp 4,500 per liter, the government will no longer subsidize the Premium gasoline because it prices has already been at par with its economic price.

She also said that the diesel oil would receive a bigger subsidy from the government because the new price would be still lower than its economic price.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said that the cut in the electricity tariffs would be able to reduce the electricity bills by 8 percent for companies which use electricity during work hours and by 12 percent for those which use electricity for 24 hours such as textile and chemical industries. (godang)