Govt Urged To Cancel Power Rate Increase Plan

Jakarta, (ANTARA News) – Various quarters have called on the government to cancel or postpone its plan to increase the basic tariff of electricity supply (TDL) by an average of 10 percent early next month.

Requests for cancellation or postponement of the plan among others come from the Regional Representatives Council (DPD), Indonesian Entrepreneurs Association (APINDO) and students.

The government`s plan to increase the gas price was making the people more confused and desperate.

“The community`s, in particular the poor people`s, access to electricity, must be secured. Their low economic capacity should not prevent poor people from obtaining electricity,” Irman Gusman, chairman of the DPD, said on Friday.

Therefore, the government should not raise the power rates. It should also halt its plan to increase the prices of fuel oils and 12-kg cylinder gas.

The increase in the prices of the three commodities will make lower income people more confused and cause them to be at a loss on how to meet their daily needs, he said.

“The price increases will automatically be followed by hikes in basic food prices. Moreover, the number of vulnerable people in the country is still very high, and the price increases could make them fall into poverty,” he said.

After all, the increase in the power rates will pose a threat not only to household consumers but also to businesses. According to the Indonesian Entrepreneurs Association (APINDO), the power rate increase will affect business world, particularly small and medium-sized entrepreneurs (SME).

“The increase in TDL rates would threaten the business world which is starting to improve, because it will increase the operating costs of the business sector,” said Chairman of APINDO for South Sulawesi, La Tunreng said.

As regards, La Tunreng`s colleague, Purnomo Namiaji who is the chairman of APINDO for Bekasi, West Java, called on the government to postpone for the time being its policy to increase the tariff.

He said that state-owned electricity company PLN should postpone the tariff hikes particularly in the face of the fasting month and the post-fasting Labaran Day festivities.

“This is because the plan to raise the rates coincided with the fasting month of Ramadan and Idul Fitri festivities. In addition, the price of gas is also to be increased,” Namiaji Purnomo said.

Purnomo admitted he was surprised with the tariff hike plan because businesses were most concerned about its domino effect. “It could cause layoffs or the closing of the company,” said Purnomo.

Therefore, students grouped the Indonesian Muslim Student Action Union (KAMMI) are opposed to the power rate hikes, calling on the government to scrap the plan.

“We are opposed to the tariff hikes and call on the government to scrap it because it will have harmful social implications,” Syamsul Maarif, KAMMI chairman for Bandung, West Java, said on the sidelines of a student rally against the policy on Friday.

Dozens of KAMMI students rallied in West Java on Friday to reject the basic tariff increase. According to Maarif, the government has never conducted an audit, and from time to time, the budget for PLN continued to go up despite the fact that it also continued to lose money.

In the face of this plan, the Indonesian Chamber of Commerce and Industry (Kadin) would soon form an advocacy team to study the basic electricity rate increase plan by the government next month.

“The establishment of the advocacy team is a form of concrete effort of Kadin in listening to the aspirations of the people who are PLN consumers,” Vice Chairman of Kadin, Vishnu Wardhana said.

He said that tariff increase was very sensitive to a number of businesses because it would add to operating costs. “If the government increases TDL around 10 percent, production costs may rise to 33 percent and can lead to high costs,” he said.

Vishnu Wardhana said that the advocacy team would consult and negotiate the government and PLN to discuss the amount of rate hikes.

The House of Representatives (DPR) and the government early this week agreed to increase TDL for customers of over 450-900 VA by between 6 and 20 percent, meaning that customers in the 450-900 VA categories would not be affected by the government`s new power hike policy.

In connection with the increase, President Susilo Bambang Yudhoyono called on the people to understand the government`s decision on electricity tariff hike. He said the decision which would only affect customers of above 450 watt power was taken to ease the burden of the national budget and so that the proceeds from the hike could be used for development efforts in other sectors.

“Almost one third of our budget is gone for subsidy and debt repayments. Our budget in 2010 totals Rp1,126 trillion with revenue totaling Rp992 billion leaving a deficit of Rp133 trillion,” he said at a meeting with journalists at the presidential palace in Cipanas, Bogor, West Java, on Friday afternoon.

President Yudhoyono said if the government did not take a decision to cut the subsidy the burden of the budget would be very heavy to reduce the cost for education and health sectors.

“One third of the budget is gone for a subsidy totaling Rp201 trillion or one fifth of the national budget. Rp90 trillion is gone for gas and fuel subsidy, Rp55 trillion for electricity subsidy and the rest for others. It this is continuing our budget will stand,” he said.

With the increase agreed by the House, the government still has to provide electricity subsidy amounting to Rp55.1 trillion.

“A limited price adjustment will be made and by excluding customers of 450 watt power the price will be raised by an average of 10 percent,” the President said. (*)



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