Gov’t Adjusts Electricity Tariffs

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 13 Juni 2022
Category: News
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Ministry of Energy and Mineral Resources, on behalf of the Government, has decided to adjust electricity tariffs for non-subsidized households in the 3,500 VA category and more, as well as to government offices in the third quarter of 2022 (July-September 2022).

“Tariffs for households using less than 3,500 VA as well as tariffs for businesses and industries will remain the same. According to the directives of the Minister of Energy and Mineral Resources Arifin Tasrif, tariff adjustment aims at realizing a fair electricity tariff in which those who have capability to pay will no longer receive subsidy from the Government,” the Ministry’s Electricity Director General Rida Mulyana said on Monday (06/13).

Rida underscored that there will be no tariff hike for subsidized customers in order to ensure provision of electricity to the public as mandated by Law Number 30 of 2009 on Electricity.

Rida also said that the adjustment can be proposed every three months by considering four parameters, namely the exchange rate of the rupiah against the United States dollar, the Indonesian Crude Price (ICP), coal prices and inflation.

The parameters have shown an increasing trend in the past three months; exchange rate of the rupiah against the USD increased to Rp14,356 from Rp14,350, ICP increased to US$104 per barrel from US$ 63 (assumption), inflation rate increased to 0.53 from 0.25 percent (assumption), and coal price of Rp837 per kg.

Considering 33 percent of the Basic Cost of Electricity Supply (BPP) is attributed by the fuel price, an increase in the four parameters certainly impacted the BPP and led to electricity tariff adjustment.

Tariffs for households in the 3,500 to 5,500 VA category (R2) and households using 6.600 VA or more (R3) will be adjusted to Rp1,699.53/kWh from the previous Rp1,444.70/kWh. In average, the monthly bill of R2 costumers will rise by Rp111,000 and Rp346,000 for R3 customers. Tariffs for Government class using 6,600   VA – 200 kVA (P1) and P3 customers will be adjusted to Rp1,699.53/kWh from Rp1,444.70/kWh, with an average bill increase of Rp978,000/month for P1 customers and Rp271,000/month for P3 customers.

In addition, P2 customers (Government using more than 200 kVA) will have tariff adjustment from Rp1,114.74/kWh to Rp1,522.88/kWh with an average bill increase of Rp38.5 million/month.

According to Rida, the hike in electricity tariff for R2, R3 customers and the government class will barely affect the inflation. Thus, people’s purchasing power is expected to be maintained since the effect on inflation is only 0,019 percent.

The electricity tariff, he added, can be adjusted again based on the latest development of the four parameters and efficiency measure adopted by state-owned electricity company PT. PLN.

The Ministry of Energy and Mineral Resources expressed hope that PT. PLN can continue to improve operational efficiency in various ways, and continue to increase sales of electricity so that the BPP can decline or at least remain as the last year’s tariffs. (PR of Ministry of Energy and Mineral Resources /UN) (RAS/MUR)

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