Electricity Tariff Increase Only For Rich Household Customers, Fixed Subsidy

JAKARTA - The Director General of Electricity at the Ministry of Energy and Mineral Resources, Rida Mulyana, confirmed that the increase in electricity rates only applies to wealthy household customers.

Meanwhile, subsidized electricity customers and household customers with a power group of 900-2,200 VA (R1) did not experience an increase in tariffs during this period and still received compensation.

"We don't touch the subsidy group at all. Just look at it, because we still have to protect the purchasing power of our brothers and sisters," Rida said at a press conference, Monday, June 13.

Rida revealed that the government is committed to protecting the community by continuing to provide electricity subsidies to customers of the 450-900 VA subsidized class, in accordance with Law (UU) Number 30 of 2009 concerning electricity.

Likewise, non-subsidized household customers under 3,500 VA, as well as business and industrial customers.

So far, Government assistance has been provided for all classes of customer tariffs, in the form of subsidies and compensation. This decision is contained in the Letter of the Minister of Energy and Mineral Resources No. T-162/TL.04/MEM.L/2022 dated June 2, 2022 concerning Adjustment of Electricity Tariffs (Period July – September 2022).

The government's decision to adjust the electricity tariff for customers of 3,500 VA and above was due to the increase in the magnitude of the four macroeconomic indicators.

In order to maintain people's purchasing power, competitiveness of the industrial and business sectors, control inflation, and strengthen national economic stability, the tariff adjustment was only applied to well-off households which amounted to 2.09 million customers or 2.5 percent, of the total PLN customers which reached 83 ,1 million. Also to the government group which amounts to 373,000 customers or 0.5 percent.

Meanwhile, for household customers with power below 3,500 VA, business and industry, there is no change in tariffs.

For postpaid customers, the tariff changes will be calculated starting from the electricity bill in August 2022, while for prepaid customers, the adjustment will be applied when purchasing electricity tokens starting July 1, 2022.

As is known, the tariff adjustment has been in effect since 2014 to ensure that compensation is right on target.

This is stated in the Regulation of the Minister of Energy and Mineral Resources Number 03 of 2020 concerning the Fourth Amendment to the Regulation of the Minister of Energy and Mineral Resources Number 28 of 2016 concerning the Tariff of Electricity Provided by PT PLN (Persero).

From 2014 to 2016, tariff adjustments have been carried out. However, in order to maintain people's purchasing power and the competitiveness of the industrial and business sectors, from 2017 to the second quarter of 2022, the government did not implement it.

This makes the government bear the compensation allocated in the APBN which is very large.

The realization of macroeconomic indicators for an average of three months, namely February-April 2022 used in the tariff adjustment in the third quarter of 2022, namely the exchange rate of Rp. 14,356 per US dollar (originally assuming Rp. 14,350 per US dollar), ICP of 103.91 US dollars per barrel ( from the original assumption of US$65 per barrel), inflation of 0.53 percent (original assumption of 0.25 percent), coal benchmark price of Rp. 70 US dollars per tonne.