Indonesia to raise electricity rates gradually

The government of Indonesia hopes to raise base electricity prices by 1 percent per month until it achieves a 15 percent hike.

Energy and Mineral Resources Minister Jero Wacik said that a 1 percent rate rise was relatively light and will not badly burden SMEs.

“If users pay Rp 200,000 (US$20) for electricity per month, they will only see a Rp 2,000 tariff hike,” Jero  said. “We hope that users will adjust to this policy.”

According to the minister, the government is waiting the “appropriate moment” to bring the new base electricity price proposals to the House of Representatives. Jero said that his ministry had thoroughly calculated the new policy.

The current categories comprise seven categories of social groups, six household groups, six business groups, eight industrial groups, seven government groups and three premium service groups.

“If we reduce the categories, the subsidies can be better distributed to lower income groups,” he said.

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