PLN proposes up to 30% electricity tariff increase

State-owned electricity company PT Perusahaan Listrik Negara (PLN) has proposed to increase electricity tariffs by 20-30 percent in order to reduce the government?s subsidy burden and improve its financial performance, company President Director Fahmi Mochtar told reporters Wednesday.

?It will be up to the government to decide when the tariff might be increased and by how much,? company President Director Fahmi Mochtar told reporters following a meeting with the House of Representatives.

Electricity tariffs increases will vary depending on the type of customers, he said.

?Tariffs will increase by less than 20 percent for small households, while those for commercial customers will increase by more than 20 percent,? Fahmi said.

The government and the House had agreed to allocate Rp 35.5 trillion (US$=Rp 9873)in electricity subsidy for 2010. PLN actually asked for a larger amount but the government and the House rejected it. PLN has thus asked to increase the electricity tariff in order to plug its financial deficit, Fahmi said.

The government keeps electricity tariffs at fixed rates via subsidies, so increases in the cost of generating power place a greater burden on the state's finances. Tariffs were last raised in 2003 by an average of about 30 percent. (Kanthi)