Indonesia's parliament Tuesday approved a government plan to raise electricity tariffs by an average of 10% from July 1, a senior lawmaker said.
“We approved the government's plan to increase electricity tariffs,“ said Teuku Rifky Harsya, the chairman of a parliamentary commission overseeing energy and mineral resources.
“We approved the government's plan to increase electricity tariffs,“ said Teuku Rifky Harsya, the chairman of a parliamentary commission overseeing energy and mineral resources.
The increase “should be fair, and not cause a burden for the people while still maintaining competitiveness for industries,“ Harsya added. Tariffs for households with capacity of between 1,300 and 5,500 volt ampere of electricity will be raised by 18%, while that for businesses will be increased by 16%, except those using above 200 kiloVA, which will see their rate raised by 12%.
Electricity tariffs for users with capacity of between 450 and 900 VA, mostly low-income households, will remain unchanged. This segment accounts for almost half of the number of users in Indonesia. Tariffs for larger industrial operations with capacity of up to 2,200 VA will be increased by 6%; between 2,200 VA and 200 kiloVA by 9%; and above 200 kiloVA by 15%.
Despite the price increases, the impact on inflation is likely to be minimal as the tariffs for the low-income consumers remain unchanged, analysts said. Bank Indonesia previously said it is optimistic that inflation this year will stay within its 4%-6% target range despite the increase.
Electricity tariffs for users with capacity of between 450 and 900 VA, mostly low-income households, will remain unchanged. This segment accounts for almost half of the number of users in Indonesia. Tariffs for larger industrial operations with capacity of up to 2,200 VA will be increased by 6%; between 2,200 VA and 200 kiloVA by 9%; and above 200 kiloVA by 15%.
Despite the price increases, the impact on inflation is likely to be minimal as the tariffs for the low-income consumers remain unchanged, analysts said. Bank Indonesia previously said it is optimistic that inflation this year will stay within its 4%-6% target range despite the increase.
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