Tuesday, 27 March 2012


           Member of Parliament Robby Rizaldi said that the increase of basic electricity tariff (TDL) in tandem with increase of oil price on April 1, 2012 was rated as inappropriate. If prices of the two commodities were increased simultaneously it night boast inflation to exceed 1 percent which might ignite social unrest.

            About increase of subsidy for electricity around Rp 64 trillion, it was more caused by postponement of the COD PLTU 10,000 MW project. Supposedly such should be included in calculations such as swap of Gajah Baru 40 MMBTUD. The increase of subsidy for electricity from Rp 40 trillion to Rp 64 trillion was inseparable from the Rupiah exchange rate value and price of Indonesian Crude Oil (ICP).

         Finance Minister Agus Martowardojo stated that if subsidy for electricity were not increased to Rp 64.9 trillion, it might result in powerhouses being unable to operate. Among the thinkable solutions to lower operational cost was if the State Electric Company (PLN) were given gas supply. Unfortunately the Floating Storage Regasification Unit (FSRU) in Jakarta Bay was not completed while the program of acceleration of the 10 thousand (MW) generator was behind schedule. The condition had forced PLN powerhouses to use oil fuel and caused subsidy for oil to swell.

         About the size of subsidy for electricity, discussion of subsidy had reached the Budgeting Commission of House and the Government planned to dissect the matter in relation to the recommendation of Commission VII of House about reduction of subsidy for electricity.

Business News - March 26, 2012

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