Govt to decide new electricity tariff in next two weeks

Within the next two weeks, the government will make a final decision on the increase in the electricity tariff proposed by state owned electricity company PLN, but assures that any increase in the electricity tariff will not give another shock to the public, Media Indonesia reported on Thursday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Wednesday that the increase in the electricity tariff would be made according to the development of fuel prices but he said that the government would also consider its negative impact on the financially weak segments of the society.

Like Purnomo, Minister of Finance Sri Mulyani also said that reducing the impact of the electricity tariff increase would be one of important considerations in raising the tariff. "We don' want the tariff increase will further worsen the buying power of the people," she added.

PLN had said that it would be difficult for the company to cope with the surge in the production costs as the result of the fuel price increase, if there were no adjustment in the electricity tariffs. PLN has to buy part of its fuel needs at market prices because not all of the fuels used by the company were subsidized by the government.

PLN's needs for high speed diesel (HSD) oil and marine fuel oil (MFO) reaches about 9.1 million kiloliters a year. In October, PLN was required to buy HSD at Rp 4,740 per litter and MFO at Rp 2,100 per litter. The company expects that this year the price of HSD will increase to Rp 6,000 per litter and that of MFO will rise to Rp 3,800 per litter. (*)