Kadin may accept 10 percent increase in power tariff

The Indonesian Chamber of Commerce and Industry (Kadin) has hinted that it might accept a 10 percent increase in state owned electricity company PLN's the electricity tariff, Bisnis Indonesia reported on Tuesday.

Kadin's vice chairman for energy and mineral resources, Dito Ganinduto said in Jakarta on Monday that the increase of electricity tariffs by about 10 percent would be still acceptable as long as the increase was based on the result of the audit made by the state audit agency BPK on PLN's operating costs.

He also understood that the increase in the tariff could not be avoided because PLN had paid a large amount of additional spending to cope with the sharp increase in the price of oil fuel, which at present account for about 30 percent of the company's energy use.

Kadin earlier refused any increase in the electricity tariffs, arguing that the impact of the sharp increase in the fuel prices in the middle of last year still lingered on the business activities of the organization's members. Any increase in the electricity tariff would therefore deal another blow to the organization's members.

PLN said that the government should give additional subsidy of about Rp 17 trillion on top of the Rp 17.7 trillion already allocated in the state budget, if the electricity tariffs were not increased. (*)