Berita

The Minister of Energy and Mineral Resources on Thursday (11/3) in Jakarta, has stated that the government’s decision to increase electricity rates is required by law to attain the support of the House of Representatives.

The Minister further added that the hike in electricity rates is mainly due to PT PLN’s requirements to carry out investments and to support a realistic national budget condition.  “We will set a reasonable amount of electricity fare, given the limited spending power of local communities”.

Increasing electricity fares is aimed at providing PLN with an income margin of 5-8% above production costs, which is then expected to provide funds for PLN to carry out further investments.  The government has to provide subsidies due to insufficient revenues.

In the 2010 national budget, electricity subsidy is marked at Rp. 37.8 trillion, which has proven to be a large burden towards the national budget and is enjoyed by those who are not the intended subsidy targets.  To overcome this problem, the government will select other forms of subsidy distribution. (TC)