PLN, putting a strain on government finances, provides heavy subsidies on power tariffs.
Fahmi Mochtar, president director of PLN, said: “The increase in the tariff is under the government’s authority. PLN needs to increase electricity tariff to improve its financial capabilities and also to cut subsidies. We subsidies all groups, including industry and business. This is not fair.”
Another PLN official informed that the company needs the tariff to be raised by an average of approximately 30% to help improve its financial position.
Previously, in 2003, the company has increased tariffs by an average of 30% but with electricity rates of approximately 7 US cents per kilowatt hour. The government plans to cut its electricity subsidy bill to 40.4 trillion rupiah ($4 billion) next year from an estimated 48.2 trillion rupiah for 2009.
