Legislator rejects power price hike<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
A House of Representatives commission rejected on Thursday the
\ngovernment's proposal to raise electricity charges for households
\nby 14.5 percent every three months next year, saying such hikes
\nwould be inordinately burdensome for the public.<\/p>\n
Commission VIII for energy and mineral resources, the
\nenvironment, and science and technology, during a hearing with
\nthe state electricity company and Minister of Energy and Mineral
\nResources Purnomo Yusgiantoro only approved the government's
\nbudget proposal for the allocation of Rp 4.1 trillion in
\nelectricity subsidies next year.<\/p>\n
\"These increases (in electricity charges) are too much. Most
\nof the public can't afford them, particularly given the fact that
\nthe government also plans to significantly raise fuel prices next
\nyear,\" commission deputy head Emir Moeis was quoted by Antara as
\nsaying during the hearing.<\/p>\n
This year, the government has allocated Rp 4.1 trillion to
\nfund power subsidies -- similar to the planned subsidy for next
\nyear.<\/p>\n
During the hearing, Purnomo proposed that power charges be
\nraised by an average of six percent during each quarter of next
\nyear.<\/p>\n
The charge hike for low income households and charitable
\ninstitutions was proposed at 14.5 percent given the fact that the
\ncharges being applied to these types of customers were much lower
\nthan PLN's production costs.<\/p>\n
PLN has been in financial difficulties for years due to the
\neconomic crisis, which was marked by a sharp depreciation in the
\nvalue of the rupiah against the dollar.<\/p>\n
The state company, which sells its power in rupiah and pays
\nmost of its costs in dollars, has for years been forced to sell
\nits power for less than its production costs. As such, it needs
\nto be subsidized by the government.<\/p>\n
Today, its power price averages 4.5 US cents per kilowatt hour
\n(kWh), compared to its production cost of 5 cents per kWh.<\/p>\n
During the hearing, the commission and the government agreed
\nto set up a small committee to further discuss the details of the
\ncharge hikes.<\/p>\n
Also during the hearing, the commission agreed to raise the
\nprice of kerosene for household consumers to Rp 700 per liter \"at
\nthe maximum\" next year from Rp 600 at present. The government had
\nproposed a new price of between Rp 700 and Rp 750 per liter.<\/p>\n
On Wednesday, Purnomo told the commission that the government
\nplanned to remove all subsidies from all fuel products, except
\nfor kerosene, next year.<\/p>\n
The subsidy for kerosene would be removed in 2004.<\/p>\n
Purnomo said the plan would cut subsidy spending next year to
\nRp 15.87 trillion (about $1.74 billion), 52 percent less than
\nthis year's spending of Rp 30.5 trillion.<\/p>\n
The plan would raise the maximum price of gasoline sold in gas
\nstations from the current 75 percent to 100 percent of the
\ninternational market price.<\/p>\n
Legislator Priyo Budi Santoso, who is a member of Commission
\nVIII as well as the House budget committee, said that the House
\nmight approve the plan as the House, the government and the
\nInternational Monetary Fund (IMF) had agreed to totally remove
\nfuel subsidies by 2004.<\/p>\n
However, he said, the budget committee was still discussing
\nthe details of the new pricing scheme with the government.<\/p>\n
\"We are currently involved in a serious debate about the new
\nprices.<\/p>\n
\"We don't want the gasoline sold in fuel stations here to cost
\nas much as in Singapore gas stations as the price in Singapore is
\ntoo expensive,\" Priyo told The Jakarta Post.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/legislator-rejects-power-price-hike-1447893297",
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