Govt plans to raise power subsidy to Rp 43.25 trillion in 2010

The government plans to increase electricity subsidy to Rp 43.25 trillion (US$=Rp 10,300) in the 2010 state budget from Rp 42.46 trillion in the 2009 state budget in line with the projected increase in the electricity use in the year.

Jacobus Purwono, the Director General of Electricity and Energy Use at the Energy and Mineral Resources Ministry, said in Jakarta on Thursday that the power subsidy would be increased to cope with an estimated 6 percent increase in the electricity use in 2010.

He said that the proposed increase in the power subsidy was also based on the assumption of rupiah exchange rate against the U.S. dollar, the crude oil price and the economic growth in the state budget.

The government plans to fix the exchange rate of rupiah at Rp 10,000 per dollar, the crude price at $50 per barrel and the economic growth at 5 percent in the 2010 state budget.

Meanwhile, state owned electricity firm PT Perusahaan Listrik Negera's (PLN) President Director Fahmi Mochtar said that the company?s oil-based fuel consumption was expected to decline by 43 percent to 4.5 million kiloliters in 2010 from 7.9 million kiloliters this year.

However, the use of gas would increase to 323 billion British thermal unit (BBTU) in 2010 from 313 BBTU this year. The coal use will also increase to 31.7 million tons from 23.49 million tons, Fahmi said.

Fahmi said earlier that PLN could be freed from the subsidy by 2012 if the government allowed the company to increase the power tariff by 30 percent this year. According to him, the electricity tariff in Indonesia was the lowest in Southeast Asian countries.

?Our electricity tariff is about 7 US cent per kilowatt, much lower than 10 US center in Malaysia, 15 US cent in the Philippines and 20 US cent in Singapore,? he said. (*)