Ministry wants same rate of electricity tariff increase for 2003

The Ministry of Energy and Mineral Resources has proposed a quarterly increase by 6-percent in the electricity standard price for 2003, which is lower than what had been planned by state power company PLN, Suara Pembaruan daily reported on Thursday.

The newspaper quoted Luluk Sumiyarso, electricity director general at the Ministry of Energy and Mineral Resources, as saying that the 6-percent raise would be acceptable to consumers because it was the same as this year. Moreover, the increase rate would not be too low for PLN, Luluk said.

Luluk said PLN had proposed a quarterly increase by 10 percent in 2003.

Meanwhile, PLN president director Eddie Widiono admitted that they had planned to increase next year?s electricity standard price by more than 6 percent every three months.

Widiono argued the higher increase was to compensate PLN which had planned not to raise power prices in 2004 when Indonesia will hold general elections. Raising prices in that year could increase political tension, Widiono said.

The government had decided to increase electricity tariffs by about 24 percent a year in order to help PLN cope with its acute cash flow problems. The increase is made quarterly by about 6 percent. (*)