Indonesia's Electricity Tariffs Raised to Curb Energy Subsidy Spending
Perusahaan Listrik Negara (PLN), Indonesia's state-owned company that has a monopoly on the supply and distribution of electricity in Indonesia, introduces the final installment of this year's electricity price hike today (01/10). Electricity tariffs are raised by 4.3 percent each quarter of 2013 as the government tries to curb huge energy subsidies. Poorer households (450 to 900 VA) are not affected by these price adjustments. After the price hikes in January, April, July and October, electricity tariffs will have risen about 15 percent in total in 2013.
The decision to raise electricity tariffs by 15 percent in 2013 was made by the House of Representatives (DPR) and the government last year as production costs of electricity (IDR 1,663 /kWh) are significantly higher than the price that is charged on the market (IDR 725/kWh). As such, PLN can only survive by financial injections from the government.
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