President Joko Widodo (Jokowi) will raise electricity rates for customers of 3,000 VA and above amid a surge in war-induced energy commodity prices Russia-Ukraine.
Jokowi’s approval was expressed by Finance Minister Sri Mulyani during a meeting with the DPR’s Budget Agency (Banggar) in order to request an increase in the energy subsidy budget at the DPR/MPR Building on Thursday (19/5).
“The President and the cabinet have agreed to share the burden, for groups of households who can afford it, which is represented by those whose electricity subscriptions are above 3,000 VA, there may be an increase in electricity rates, only in that segment and above,” said Sri Mulyani.
However, it is not yet clear how much the rate increase will be. Likewise with the timing of the rate increase.
However, Sri Mulyani said the prices of other commodities would not increase. For this reason, the government will increase the subsidy budget and compensation funds for energy availability for the community.
“Some commodity prices have not changed,” he added.
Initially, the ceiling for energy subsidies was Rp. 134.8 trillion in the 2022 State Budget. However, the government estimates that the energy subsidy budget needs will reach Rp. 208.9 trillion.
The reason is, there is an increase in world crude oil prices which helped raise the price of Indonesian crude oil (ICP). The government estimates that the ICP assumption, which was originally in the range of US$63 per barrel, will increase to US$100 per barrel.
“So we propose an additional IDR 74.9 trillion in energy subsidies for fuel, LPG and electricity. For fuel and LPG IDR 71.8 trillion and electricity IDR 3.1 trillion. We propose to pay this in full,” Sri Mulyani explained.
In addition to energy subsidies, the state treasurer also asked for the approval of Banggar DPR to increase the allocation of energy compensation funds from Rp. 18.5 trillion to Rp. 234.6 trillion. This fund will be given to PT Pertamina (Persero) and PT PLN (Persero) which have borne the burden during the recent rise in commodity prices.
“So this year’s compensation increase is IDR 216.1 trillion,” said Sri Mulyani.
Meanwhile, the government still has debts to pay compensation funds of IDR 108.4 trillion in 2021. Thus, the total need for compensation funds will reach IDR 324.5 trillion this year.
“But we propose in the APBN Law to only add IDR 275 trillion, this includes until this December we ask for a BPKP audit. Later the rest will be paid in 2023 amounting to IDR 49.5 trillion, namely IDR 44.5 trillion for LPG fuel and IDR 5 trillion for electricity,” concluded Sri Mulyani.
(uli / sfr)
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