PLN may seek approval to raise rates

PLN may seek approval to raise rates

PT Perusahaan Listrik Negara (PLN), Indonesia's state-owned power utility, may consider asking the government to increase electricity prices next year to help the company cope with soaring fuel prices.

An increase in crude oil price by 10 percent boosts the utility's fuel costs by Rp 1.5 trillion (US$162.6 million), PLN president director Eddie Widiono said. The company had planned to spend about Rp 15 trillion this year to buy oil to fuel its power plants, based on the assumption that crude oil prices are at $22 a barrel, he said.

"Right now we're trying to use more gas or coal to minimize the impact on rising oil prices," Eddie told reporters in Jakarta. "We're still calculating to see whether we need to ask the government to increase electricity rates."

Crude oil futures in New York have gained 77 percent in the past year as economic growth in China and the U.S. spurred demand. It rose to a record $50.47 a barrel in New York earlier today.

PLN had a loss of Rp 3.56 trillion, or Rp 77,176 a share, in 2003, compared with a loss of Rp 6.06 trillion, or Rp 131,423, a year earlier, the utility said in June. -- Bloomberg