Govt to eliminate electricity subsidy

The government will eliminate electricity subsidy for selected group of consumers gradually and as such will increase the power price every two months starting in July this year, the Ministry of Energy and Mineral Resources (MEMR) said in a statement on Friday.

In order to socialize the plan, Director General of Electricity Jarman held a cofee morning meeting with representatives of governmental offices, universities, business associations, and other customers of state owned electricity firm PT Perusahaan Listrik Negara (PLN), the ministry said.

Jarman explained the move is necessary in order to maintain sustainability of power supplies, improve PLN?s service to consumers, increase electrification ratio and direct electricity subsidy directly on target.

Chapter 34 of Electricity Law No 30/2009 stipulates that the government has the right to determine power retail price with approval from the House of Representatives.

To follow up the conclusion of the hearing between the House?s Commission VIII and the MEMR on June 10, 2014, the government will gradually remove subsidy for electricity through gradual power price increases non-listed mid-sized industrial customers (categorized by PLN as I-3 customers), household customers (R-1 1,300 VA, R-1 2,200 VA, R-2 3,500 VA through 5,500 VA), governmental customers (P-2 over 200 kVA), streetlight (P-3).

The increases in the power prices are expected to push the public to change their lifestyle that they will use electricity more efficiently.

Editing by Johannes Simbolon