PLN ups electricity rate

The Indonesian government has allowed the cash-strapped state electricity firm PT Perusahaan Listrik Negara (PLN) to increase tariffs for the heaviest users of power from Sunday.

PLN President Eddie Widiono was quoted by the Jakarta Post as saying the rise would not affect the 67 percent of users, mainly poor households, who consume less than 30 kilowatts an hour.

Riots broke out in Indonesia last month after the government hiked fuel prices by 30 percent in an attempt to curb a ballooning budget deficit.

Widiono said intensive electricity users would see their rates rise by at least 22.3 percent, and by a further increase of at least 11.8 percent from October.

The increases will bring PLN another 2.3 trillion rupiah (about 201 million dollars) in revenues in the second half of the year, but the company will still be in the red to the tune of 4.5 trillion rupiah, the president said.

PLN has been suffering from serious financial problems since economic crisis hit Indonesia in mid-1997.

The state company earns its revenue in rupiah but has to buy the bulk of its power from private suppliers who charge in dollars. (*)