The Indonesian Energy and Resources Minister announced that the government will reduce electricity tariffs. For this purpose, the government will not introduce any price hikes by the end of 2017 and will also increase the efficiency of the state-held firm Perusahaan Listrik Negara (PLN).
The government also announced the revocation of the subsidy for 900-VA subscribers (about 4.5 million customers) but not for 450-VA subscribers, which are subsidies based on TNP2K data. The rationale behind the subsidies lift is to encourage the equal distribution of electricity throughout the country and use the funds in order to increase the electrification of rural areas.
Previously, the 900-VA household customers had tariff increases in January 2017, in March 2017 and in May 2017. It went from IRup 605/kWh (US$4c) up to IRup 791/kWh in January. In March, the tariff was raised again to IRup 1034/kWh, and in May, the price went up to IRup 1352/kWh (US$10c). There was an increase planned up to IRup 1467/kWh for July but it is now cancelled.
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