House asks the government to lower electricity tariff

The House of Representatives (DPR) has called on the government to cut electricity tariff by between 15 and 25 percent as part of an economic stimulus package to help the country?s industries cope with the impact of the world?s financial crisis, Bisnis Indonesia reported on Saturday.

Harry Azar Aziz, the vice chairman of the House?s state budget committee, said with the fall in the prices of oil, which account for between 30 and 40 percent of power generation costs, state-owned electricity company PT Perusahaan Listrik Negara (PLN) could save between 6 and 8 percent of costs.

?With the lower production costs, PLN should be able to reduce electricity costs by between 15 and 25 percent,? Harry said.

Meanwhile, Eddy Putra Irawady, the deputy of the Coordinating Minister for the Economy, said that the government was considering cutting the electricity tariffs as part of the economic stimulus package announced recently.

According to reports of several surveying agencies, electricity and infrastructure are among important components affecting the performances of the country?s industrial sector. ?Therefore, the government is also considering cutting the electricity tariffs to help the economy,? he added.

Eddy said the Indonesian Chamber of Commerce and Industry (Kadin) had suggested the government to provide additional subsidy allocation to PLN as part of the stimulus package to maintain the economic growth amid the fall in the demand from the world market.

With a higher subsidy, PLN would have more leeway to cut its tariff which would in turn help the overall economic activities, he said. (*)