Indonesian Businessmen Push Govt to be Fixed on Electricity Tariff

Businessmen are lobbying the government to have a discussion with some business associations regarding the raise on the electricity fee in July 2010.

"I hope the government will discuss this with the associations. Either with us, or the Kadin (Indonesian Chamber of Commerce), Hipmi (Indonesian Young Entrepreneur Association), or other associations to discuss the structure of the tariff raise," stated the chairman of the Employers Association of Indonesia, Sofjan Wanandi, to Kompas.com, Jakarta, Tuesday.

For the time being, the government has been fickle regarding the plan to raise the electricity tariff. The plan was sounded since last year, but the government kept postponing it for various reasons.


The reason for the raise is because there hasn't been one since 2003. Initially, the government wanted to raise the average tariff for all categories in overall, but still with special considerations for low-end customers.

Last February, the plan was postponed because the government raised the allocated subsidy budget. But a month later, the policy has changed again. Though the allocated subsidy budget has been raised by Rp. 16.7 trillion in the 2010 amended State Budget, but the government still plans to raise the electricity tariff by 15 percent in July 2010. The plan will soon be forwarded to the House of Representative.

"The government said it (tariff) would go up, then no it wouldn't. Last time it was postponed because the House rejected it, but now suddenly they want to raise it for all categories. We're confused," Sofjan complained.

He stated that businessmen are calculating the price adjustments to match the raised electricity tariff, by considering the affected cost of production.

"The associations are re-calculating all company costs and definitely this will raise the prices."

kompas.com / 9 Maret 2010