The poorer segments of Indonesia are spared from the price hike as it will only affect people within the 1,300 VA segment or higher. Households of 450 to 900 VA - the poorer segments - will not be affected.

According to the Ministry, Indonesians consumption of electricity was generally reduced in January compared to the previous month, although businesses in fact increased their electricity consumption. On 1 April 2013, the next increase of 4.3 percent is expected.

Indonesia finances huge energy subsidies through its government budget. About US $20 billion is allocated for fuel subsidies, while about US $9.6 billion is used to keep electricity cheap. In particular the fuel subsidies are often criticized for distorting the economy.

Bahas