Power subsidies projected to increase 42.5 percent next year

The government has projected subsidies for electricity to increase by 42.5 percent to Rp 58.72 trillion next year, from the state budget target of Rp 40.7 trillion this year.

Jarman, Director General of Electricity at the Ministry of Energy and Mineral Resources, in a hearing with the House of Representatives on Tuesday, said the projection was based on several assumptions including that the Indonesian crude price/ICP will average US$85 per barrel, the dollar-rupiah rate will average Rp 9,200 and the electricity demand will increase by 9 percent.

The subsidy projection is also based on the assumption that the electricity tariff will stay at Rp 729/kWh.

Except for the natural gas, the consumption of the country?s power plants for fuels is expected to increase next year. The consumption of oil products such as high speed diesel (HSD), marine fuel oil (MFO) and industrial diesel oil (IDO) is projected to increase to 4.56 million kiloliters next year, from 4.44 million kl set in this year?s state budget; the consumption of biodiesel to jump more than eight times to 245,980 kl from 29,653 kl this year; coal consumption to increase to 42.29 million tonnes, from 36.77 milion tonnes; geothermal steam consumption to slightly increase to 3,416,947 MWh from 3,362,031 MWh. The gas consumption is however expected to drop to 344,657 BBTU from 389,334 BBTU.

As for the fuel prices, the coal price is assumed to increase to Rp 687.8 per kilogram next year as against Rp 630 per kilogram this year.

Coal will make up 56.66 percent of the energy mix of the national power sector, up from 49.02 percent this year, while gas will account for 23.74 percent, down from 29.77, hydropower 6.77 percent as against 6.74 percent, biodiesel 0.50 percent, as against 0.08 percent and petroleum-based products 10.15 percent, down from 11.7 7 percent. (Bernard)