We have calculated that the impact on inflation is only 0.019 percentJakarta (ANTARA) - The Indonesian government has announced an increase in electricity tariffs for non-subsidized household customers, with electricity connection capacities of 3,500 VA and above and for government groups starting on July 1, 2022.
Director-General of Electricity at the Ministry of Energy and Mineral Resources Rida Mulyana stated that the policy to increase electricity tariffs only had a 0.019-percent impact on inflation.
"We have calculated that the impact on inflation is only 0.019 percent," Mulyana stated at a press conference on Monday.
He later explained that this electricity tariff adjustment will contribute to maintaining the people's purchasing power since the government will only raise electricity rates for households, with middle to upper or luxury economies.
Mulyana noted that the policy of increasing electricity rates had contributed to saving compensation of Rp3.1 trillion, or 4.7 percent of the total compensation disbursed by the government to state-owned electricity company, PT PLN.
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The government decided to hike electricity tariffs based on an increase in four macroeconomic indicators, especially the high world crude oil prices that caused an increase in electricity production.
PT PLN President Director Darmawan Prasodjo stated that every US Dollar increase in the world crude oil prices has an impact on the overall cost of production of up to Rp500 billion.
"At the start of 2022, our state budget has assumed that the price of crude palm oil will stay at US$63 per barrel from the current price of Indonesian crude oil (ICP), which is approaching almost US$100 per barrel. The production costs increase along with the extraordinary increase in the crude oil price," he pointed out.
The policy to increase electricity tariffs is only applied to non-subsidized households, totaling 2.09 million customers, or 2.5 percent of the total PLN customers, reaching 83.1 million, and to the government group, totaling 373 thousand customers, or 0.5 percent.
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The number of non-subsidized household customers, with electricity connection capacities of 3,500 VA, was recorded at 1.7 million and 316 thousand household customers, with electricity connection capacities of 6,600 VA. They would experience a tariff increase, from Rp1,444.7 per kilowatt hour (kWh) to Rp1,699.53 per kWh.
Meanwhile, customers, with electricity connection capacities ranging from 6,600 VA to 200 kilovolt amperes (kVA) also experienced an increase, from the previous Rp1,444.7 per kWh to Rp1,699.53 per kWh. For customers, with electricity connection capacities of above 200 kVA, the tariff is adjusted, from Rp1,114.74 per kWh to Rp1,522.88 per kWh.
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Translator: Sugiharto P, Resinta S
Editor: Fardah Assegaf
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