JAKARTA - Head of the Center of Food, Energy and Sustainable Development Institute for Development of Economics and Finance (Indef) Abra Talattov said that the government needed to ensure that the electricity tariff discount was given in early 2025 so that it was right on target.
The government has decided to provide a 50 percent discount on electricity rates to 97 percent of PLN electricity customers in January-February 2025 to reduce the impact of increasing VAT to 12 percent.
"This policy can help ease the burden of living expenses, especially for families with limited income, most of which depend on subsidized electricity rates," said Abra Alattov in Jakarta, quoted from Antara, Tuesday, December 17.
He also appreciated the application of the discount automatically, which showed progress in the PLN service system, so that it could make it easier for customers to enjoy the discount without administrative difficulties.
However, he said that there are a number of things that need further observation, including the need for effective monitoring to avoid potential abuse or inaccuracy in the distribution of discounts.
Abra also asked PLN to strive so that the discounting does not burden the company's operations and ensure that service quality is maintained, especially in terms of infrastructure maintenance and stability of electricity supply.
This is because the electricity discount policy has implications for the need for an additional electricity compensation budget.
"This means that the Ministry of Finance also needs to ensure that the compensation payment can run smoothly so as not to interfere with PLN's operations," he said.
In addition, Abra said that the effectiveness and magnitude of the impact of the policy in increasing people's purchasing power also needed to be monitored and evaluated carefully.
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He stated that the policy needs to be ensured so that it does not only become a temporary step that does not have a major impact on long-term consumption patterns.
If the evaluation results show a positive impact on increasing public consumption, he said that the government could consider continuing the stimulus for electricity discounts.
"Overall, this policy is a step that should be appreciated, but it needs to be balanced with careful evaluation and planning so as not to have a negative impact on PLN operations and the overall energy sector," he added.
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