PLN plans to peg tariffs with international oil prices

State owned electricity company PLN is studying the possibility of pegging its electricity tariffs with international oil prices to help cope with the continued increase in the company's operational costs, Media Indonesia reported on Thursday.

PLN's president Eddie Widiono said in Jakarta on Wednesday that the plan to peg the tariffs with international oil prices was one of several scenarios being prepared to adjust the current tariffs with the sharp increase in the company's operational costs.

The tariff adjustment would be needed to help PLN cope with the surge in operational costs which have significantly increased due to the skyrocketing oil prices and the fall in the rupiah against the U.S. dollar, he said.

"As required by the House of Representatives, we have prepared a number of scenarios in adjusting the tariffs. But we could not unveil it now because we should first discuss the plan with related agencies," he added.

PLN receives a great amount of subsidy from the government to finance its fuel needs, but the subsidy is not enough to curb with the increase in the fuel prices, and the higher than expected fuel needs. (*)