Jakarta (ANTARA News) - The state enterprises ministry has not yet decided to lower the business margin of state-owned electricity company PLN from eight percent to seven percent, a minister said.

"There is a discourse to lower the margin to seven percent but at present the company still applies the 8 percent margin," State Enterprises Minister Mustafa Abubakar said here on Monday.

He made the remarks before attending a coordination meeting on the Master Plan for Acceleration and Expansion of Indonesia`s Economic Development (MP3EI).

The minister said that even though the percentage of PLN`s profit margin had not yet been decided, the electricity firm was expected to carry out efficiency so that electricity subsidy would be lowered.

"Efficiency will be adjusted to the ability to provide gas based on the need," the minister said.

He said that besides efforts to explore new gas fields at home and abroad, the government must also speed up the development of floating gas terminals.

Earlier, Commission VII of the House of Representatives and the Ministry of Energy and Mineral Resources decided a ceiling indicator for electricity subsidy for 2012 state budget at about Rp45-Rp55 trillion.

The subsidy amount was decided based on the rupiah exchange rate assumption at Rp9,000-Rp9,300 per US dollar and Indonesian oil crude price at US$75-US$95 per barrel.

Mustafa said that the government must find a compromise point because it (lowering the margin) would raise subsidy.

"I have not been able to predict whether or not it would cause subsidy increase and basic electricity tariff rise," the minister said.

The minister said that the lowering of PLN`s margin by one percent will increase the amount of subsidy by Rp15 trillion.

"There must be increase by Rp15 trillion if the margin is lowered by one percent. Therefore, we have to calculate operational and fuel oil efficiency," the minister said.
(Uu.A014/HAJM/S012)

Editor: Priyambodo RH
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