MoF supports power tariff increase
Monday, April 21 2014 - 04:08 PM WIB
Second Vice Minister of Finance Bambang P.S. Brodjonegoro said the ministry supported the decision of MEMR to issue Ministerial Regulation Number 9/2014, which eliminates electricity subsidy for industrial customers of the I3 publicly-listed company category (which uses power of above 200 kVA) and those of the I4 category (above 30,000 kVA power).
"With the gradual removal of subsidy on electricity, the state will save up to Rp 9 trillion," he said, in the Coffee Morning event entitled "Socialization of MEMR Regulation Number 09 of 2014 on Electricity Tariff" in Jakarta, Thursday.
Under the Ministerial Regulation No 9/2014, electricity tariffs for large industries increased by a total of 64.7 percent and for publicly-listed companies by 38.9 percent this year. The tariff increase will be made in four stages starting in May, and then in July, September and November.
Business associations have protested the regulation, saying the tariff increases are too burdensome.
?If the electricity tariff keeps on increasing, we?ll not be able to compete with companies in ASEAN,? Chairman of the Indonesian Employers Association, SofyanWanandi was quoted by Kontan daily as saying, referring to the Association of Southeast Asian Nations.
He said that the current electricity tariff increase will cause many companies to go bankrupt.
In response to the protests, Bambang noted while the new policy will significantly needed to energy subsidiary, a ?psychological approach? should be carried out towards various groups of business and incentives must be provided to them so that "Business world can feel that their business is appreciated.?
He thus called the MEMR to design incentives for businesses impacted by the new policy.
Editing by Johannes Simbolon