Power rates up, oil stable next month

The Jakarta Post, Jakarta

State-owned electricity firm PT PLN said power prices will increase on April 1 by 6 percent in line with the presidential decree allowing it to increase charges every quarter throughout the year.

"As long as there is no new government policy reviewing the presidential decree, power rates will automatically increase every quarter of the year.

"So, there is going to be an average 6 percent hike in electricity rates next month," Muljo Adji, the company's spokesman, told The Jakarta Post on Thursday.

PLN has been permitted by the government to raise its charges in each quarter starting 2001 with the aim of improving the firm's financial condition. PLN suffered losses of around Rp 4.47 trillion (US$502 million) last year.

The government said the increase would bring the rate to a commercial level of 7 U.S. cents per kilowatt hour (kWh) in 2005.

The current price of Rp 488 per kWh was equal to around 5.42 U.S. cents.

Separately, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the government was sticking to its pledge not to increase domestic oil prices, despite increasing global oil prices triggered by fears of a long war.

Purnomo said fuel supplies for the domestic market remained secure, even after the Iraq war broke out last week, which provided no reason for the government to raise prices.

"Amid the current uncertainties, we need to do this to provide the people with comfort and certainty," Purnomo told reporters after a cabinet meeting.