Indonesia's inflation rate in June was 1.03 percent, a significant rise compared to the previous month (deflation of 0.03 percent). Although the government's decision to increase the price of subsidized fuel in the second half of June 2013 already made an impact on the country's inflation rate, it is expected that in the next two months inflation will peak over two percent. Apart from the fuel price, other factors that will cause high inflation are the start of the holy fasting month (Ramadan), the new school year and the higher electricity rate.

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Indonesia's June inflation rate was recorded at 1.03%. Components that contributed most to this increase were food (including instant foods), drinks, tobacco and housing (gas, water and electricity). The government's decision to raise the price of subsidized fuel last month already made an impact but it is expected that this impact will be heavier in the months ahead when more prices are revised upwards. On 22 June, prices of subsidized gasoline were raised by 44%, while prices of subsidized diesel were raised by 22%.

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Bloomberg reported that the investment agency of Indonesia's finance ministry will start a fund of IDR 3 trillion (USD $302 million) to finance the exploration of geothermal energy resources in Indonesia this year. Saritaon Siregar, the agency’s chairman, said this in an interview at a conference in Jakarta this week. The investment fund is in line with Indonesia's intention of lowering its dependency on expensive and environmentally unfriendly fossil fuels as a source for energy and electricity.

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Perusahaan Gas Negara (PGN) is a government controlled gas firm that forms Indonesia's largest natural gas transportation and distribution company. It operates a distribution network that extends for 3,865 kilometers and a transmission pipeline network that measures 2,047 kilometers. PGN plays an important role in Indonesia's electricity production as it sells about 40 percent of its total sales volume to the country's power generation industry. It also forms one of the largest Indonesian companies in terms of market capitalization.

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The Ministry of Energy and Resources stated that the Indonesian government will go ahead with the increase in electricity rates this year. Up to the end of this year, electricity rates will increase every quarter by about four percent to reach a total increase of 15 percent. In early January, the first rate increase was introduced by raising the tariff of electricity sold by state-owned Perusahaan Listrik Negara (PLN), the sole electricity provider in Indonesia. 

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Today, Statistics Indonesia (BPS), a non-departmental government institute, stated that the inflation rate of January increased due to the government's decision to raise electricity tariffs and due to massive floods in Jakarta and other cities. January's headline inflation is 1.03 percent. The year-on-year inflation rate now stands at 4.57 percent; still within Indonesia's Central Bank's target of 4.5 ±1 percent.

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Subscribers may have noticed that over the past couple of months, perhaps even the past half year, we devoted one article per month to the topic of renewable energy. And, it is a combination of factors that motivates this decision.

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The novel coronavirus (COVID-19) crisis has a wide range of economic and social consequences. For example, the Indonesian economy is likely to contract this year (for the first time since 1998), while millions of Indonesians have lost their jobs over the past three months, and the majority of the country’s enterprises have seen their sales plunge.

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On Sunday 4 August 2019 and Monday 5 August 2019 the capital city of Jakarta, a large part of West Java, and parts of Central Java were without electricity. On Sunday the power outage lasted from around noon to 21:00 pm, an unusually long period, while the following day the outage lasted for approximately six hours (depending on the exact location); also an unusually long period albeit not as long as on the preceding day.

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Based on the latest reports - and contrary to earlier plans - the Indonesian government will not postpone the development of 15,200 MW of power projects. Earlier the government said it wanted to delay various power projects in an effort to curtail imports, thus improve the country's current account balance and ease heavy pressures on the rupiah exchange rate.

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As Indonesia is increasingly focusing on renewable energy sources, the potential of geothermal power in Indonesia is usually in the spotlight. However, the potential of ocean thermal energy conversion (OTEC) is seldom mentioned, while it is estimated that Indonesia's OTEC potential is around 41,000 megawatt (MW), among the biggest worldwide.

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The central bank of Indonesia (Bank Indonesia) said it carefully monitors the impact of higher electricity tariffs on the nation's inflation pace in March 2017. This month the government implemented the second phase of its gradual electricity tariff increase program for 900-VA household customers. Indonesia's state-owned electricity company Perusahaan Listrik Negara (PLN) decided to raise the electricity price for 900-VA households three times this year in order to cut energy subsidies and ensure that these subsidies are indeed channeled to the right people.

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Indonesian Vice President Jusuf Kalla has high hopes for the development of renewable energy, such as geothermal energy, in Indonesia. Given that fossil fuels are exhaustive and dirty, clean and renewable energy sources are the future. Therefore, Indonesia should make more use of its huge geothermal energy potential. Southeast Asia's largest economy is estimated to contain 40 percent of the world's total geothermal reserves. However, it only utilizes 5 percent of its geothermal energy capacity.

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The central bank of Indonesia (Bank Indonesia) expects to see deflation in April 2016 on the back of controlled food prices as the harvest season has arrived. Bank Indonesia Governor Agus Martowardojo said a central bank survey shows deflation of 0.33 percent month-to-month (m/m) during the first three weeks of April. Besides lower food prices, Martowardojo also attributes April deflation to the government's decision to cut fuel prices (premium gasoline and diesel) by IDR 500 (approx. USD $0.04) per liter per 1 April. This move led to a 4 percent drop in public transportation tariffs.

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Elnusa is an Indonesian company that provides services in the upstream oil & gas sector. Although the oil & gas sector has been plagued by low prices, thus curtailing corporate earnings, there is something that makes Elnusa's position strong. Recently, Elnusa purchased a seismic vessel that can be used for marine seismic surveys for oil & gas exploration. In Indonesia only a few companies have the skills and equipment for marine seismic activities (and only a few companies have a seismic vessel). Moreover, Elnusa's new vessel is a modern one that is equipped to conduct high quality surveys in deep sea.

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According to the Association of Indonesian Processing and Refining Companies (AP3I), consumption of mineral ores in Indonesia will be solid starting from 2017 due to the start of operations of new smelters. Jonathan Handojo, Vice Chairman of the AP3I, says domestic consumption of nickel ore will reach 7 million tons in 2017, roughly the same amount of nickel ore that was exported in 2009 before the New Mining Law - which stipulates a ban on exports of mineral ore from Indonesia (per January 2014) - was revealed.

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