Indonesian govt to lift subsidy for 18 million electricity subscribers

Indonesian govt to lift subsidy for 18 million electricity subscribers

Photo document of the technician of PLN checks the electrical network in Jakarta. (ANTARA/Akbar Nugroho Gumay)

The elimination of the subsidy will depend on the situation."
Jakarta (ANTARA News) - State-owned electricity company PLN confirmed that its verification of the firms subsidized household customers revealed that some 18 million of them were actually able to pay the normal power tariff.

Hence, the government is planning to drop the subsidy for some 18 million household customers, probably starting next month in June or July.

According to Energy and Mineral Resources Minister Sudirman Said, the abolishment of the electricity subsidy now awaits the decision of President Joko Widodo (Jokowi).

"We have conducted verifications based on a limited cabinet meeting, which discussed the electricity issues. We have filed a report, and now, we are waiting for the presidents decision," Sudirman stated at the Energy and Mineral Resources Ministrys office on April 4.

The minister pointed out that there were 22 million subsidized household subscribers. However, some 18 million of them were no longer entitled to receive subsidy as they had sufficient purchasing power to pay the normal tariff.

The data was obtained from PLN and the National Team for the Acceleration of Poverty Elimination (TNP2K) that had been reported to the energy and mineral resources ministry. Based on the report, only some 4.1 million out of 22 million customers were eligible to receive the electricity subsidy.

However, the minister said he could not as yet ascertain when the power subsidy would be eliminated. Earlier, rumors were circulating that the subsidy for the 900-volt ampere subscriber group would be scrapped by July 2016.

"The elimination of the subsidy will depend on the situation. It can be done soon or even be put off," remarked Sudirman.

Based on verifications, several relatively financially able consumers in numerous regions in Indonesia are still receiving electricity subsidy.

The TNP2K remarked that the subsidy may be dropped for some 107,550 customers in Aceh Province as they were not categorized as poor families.

The same trend was also observed in East Java where some 497 thousand subscribers enjoyed subsidized electricity when they were, in fact, not entitled to the aid.

The government has planned to cut its electricity subsidy to Rp38 trillion this year from Rp66 trillion last year, assuming that it stopped offering electricity at subsidized rates to households in January. Sudirman did not reveal how much the government stood to save now when the subsidy would only be phased out in June, according to the Jakarta Globe.

However, the Indonesian Consumers Foundation (YLKI) said that government needs to inform the public about its plan to abolish the electricity subsidy for household customers with sufficient income to purchase electricity at the normal rate.

The government should also ensure the validity of data on the number of consumers eligible to receive electricity subsidy, Chairman of the YLKI for East Nusa Tenggara Marthen Mullik stated in East Nusa Tenggara Wednesday (May 4) said.

Besides popularizing the plan, the government and state-owned electricity company PLN should also conduct a re-verification to ensure the validity of the data, he noted.

PLNs provisional data indicated that some 18 million household subscribers of subsidized electricity were no longer entitled to the aid. They are part of 22 million customers who have so far received the subsidy.

As part of its verification process, PLN had visited 4.1 million target households and found that 3.4 million of them were no longer entitled to receive the subsidy facility. In future, PLN will not conduct any further verification but instead directly drop the subsidy for the outlined households.

Consumers having any objections to the abolishment of the subsidy can file a complaint with the nearest government apparatuses, such as the rural or village head offices.

The complaints will be sent via Internet or storage devices to the sub-district offices to be added to the PLN database.

"Efforts to draw support for the plan must be made to inform the people, and this should be followed up by another verification to ensure the validity of data on household subscribers who are either eligible or ineligible to receive the power subsidy," he pointed out.

The verification must be conducted independently to facilitate the creation of an accurate database, which will help to prevent any problems in future.

In the meantime, PLN has raised non-subsidized electricity tariffs for 12 groups of subscribers by Rp7-10 per kWh in May 2016. The electricity tariff hike is particularly the result of a rise in Indonesian crude price, chief of PLN commercial division Benny Marbun said here on Sunday.

"In addition, the inflation rate also increased. However, the rupiahs strengthening against the US dollar has held electricity tariff hike," he said.

ICP in March which serves as one of the references to set electricity tariffs in May stood at US$34.19 per barrel, up by US$5.27 per barrel from US$28.92 per barrel in February, he said.

The inflation rate also rose 0.28 percent to 0.19 percent in March from -0.09 in February, he said.

However, the rupiah strengthened Rp322 to Rp13,194 per dollar in March from Rp13,889 per dollar in February, he added. Benny said electricity tariffs in May for low voltage (TR) rose Rp10/kWh from Rp1,343/kWh in April to Rp1,353/kWh in May.

The TR tariffs apply to seven groups of subscribers, namely R1/1,300 VA, R1/2,200 VA, R2/3,500-5,500 VA, R3/6,600 VA and above, B2/6,600-200 kVA, P1/6.600-200 kVA, and P3.

Electricity tariffs for medium voltage (TM) rose Rp8/kWh from Rp1,033/kWh in April to Rp1,041/kWh in May.

The TM tariffs apply to three groups of subcribers, namely B3/>200 kVA, I3/>200 kVA, and P2/>200 kVA.

Electricity tariffs for high voltage (TT) increased Rp7/kWh from Rp925/kWh in April to Rp932/kWh in May. TT tariffs apply to a group of subscribers, namely I-4/30 MVA and above.
(T.A014/INE/KR-BSR)

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