Indonesia to raise electric tariff by phases

Kamis, 06 September 2012 | 09:20

Finance Minister Agus Martowardojo said the government will propose plan to the House of Representatives to raise by phases the electric tariff for certain segments of consumers.The proposed increase is in line with the draft state budget for 2013 and the tariff increase will not be imposed on all consumers, Agus said.

He indicated some consumers such as households using electricity up to 450 watts will be exempted from the tariff hike.

"Energy and electricity subsidy has to be cut by phases on certain consumers such as middle to high class households and industrial consumers" Agus said here on Wednesday.

He called on households and industrial consumers to understand that redressing is needed in the country`s electricity sector such as in tariff.

Raising electric tariff has been a sensitive issue in the country often triggering anti government demonstrations supported by opposition parties .

Agus said so far all consumers including those not deserving subsidy such as households with electricity of more than 450 watts have enjoyed subsidized tariff .

"It would be much more useful if the subsidy is used to finance construction of infrastructure and for social spending," he said.

Raising the electric tariff is part of the short term plan to cut energy subsidy , he said, adding the increase would be made per quarter in 2013.

The government has assured the public it would not raise the prices of oil fuels .

Meanwhile, the government has planned large scale development of renewable energy to economize on oil and to cop0ew with possible energy crisis in the future.

The government is also building coal fired power plants with a total capacity of 10,000 megawatts.