Govt delays power rates increase

The government decided not raise power rates for the October-December period this year amid strong public pressure.

Minister of Mineral Resources and Energy Purnomo Yusgiantoro told reporters late on Tuesday that the decision was taken after the rupiah had strengthened, and in a bid to help ease the burden of the poor people.

Under a presidential decree issued in 2002, state-owned electricity company PLN has been allowed to raise power rates by an average of 6 percent each quarter since early last year until 2005. It is expected by 2005, the average rates could reach 7 U.S. cents per Kilowatt hour (Kwh), which is seen as the level profitable for a power company to operate.

But the rate hike policy has been protested by many sides lately including lawmakers who have suggested the government to delay the hike especially in as the 2004 general elections near. A power rate hike is feared to create political instability.

The current average power rate is at 6.79 U.S. cents per Kwh.(*)