PLN cuts energy subsidy to Rp 11.6 trillion in first semester

State electricity company PT Perusahaan Listrik Negara (PLN) has successfully cut its fuel spending to Rp 17 trillion (Rp 9,400) during the first semester of this year thanks to the diversification of energy use.

PLN said in a press release on Thursday that the cut in the fuel spending had enabled the company to reduce the energy subsidy to Rp 11.6 trillion during the six-month period, far lower that those allocated by the government.

This year, the government has allocated up to Rp 50 trillion in subsidy for the company?s fuel spending.

Through its energy diversification program, PLN had increased the use of gas to 123,000 bbtu in the first semester from 86,000 bbtu in the same period last year. The use of coal also increased to 10.8 million tons from 10 million tons. With the energy diversification, PLN was able to reduce the use of oil to 4.5 million kiloliters from 5.9 million kiloliters.

According to the company?s audited financial report, its oil spending declined by 53 percent to Rp 43.67 trillion in the first semester of this year from Rp 20.78 trillion in the same period, last year.

The company?s total revenues, however, dropped to Rp 68.89 trillion in the first semester of this year from Rp 78 trillion in the same semester last year due to the decline in the subsidy from the government.

The company?s revenue from electricity sales rose to Rp 43.49 trillion from Rp 40.96 trillion, but the income from the government?s subsidy dropped by 32 percent to RP 24.69 trillion from Rp 36.32 trillion.

PLN said that its operating costs declined by 16.8 percent to Rp 62.81 trillion from Rp 75.48 trillion. The company?s spending for fuel and electricity purchases accounted for 55 percent of the operating costs, while electricity purchases from independent power producers accounted for about 20.7 percent. (godang)