Gov't To Reduce Rp 7.9 Trillion Electricity Subsidy For Industry

Jakarta, Jan 20 (Antara) - The Indonesian government plans to reduce Rp7.9 trillion worth subsidy electricity for 432 industrial consumers of the State run Electricity Company, PT PLN in 2014. The state`s electricity company`s data received on Monday reported that out of the 432 industrial customers, for who it had reduced the subsidy, 371 were from the I3 group, which were already registered on the stock exchange and 61 were in I4 group. I3 Group is those industrial customers who use medium -voltage electrical power above 200 kVA, while the I4 group is that customer who uses high-voltage network with over 30 thousand kVA power. Subsidy reduction in each group during 2014 consists of Rp1.3 trillion for the I3 group and Rp6.6 trillion for the I4 group. The I3 group consumer consists of 10,835 companies, where 371 companies have been registered in the stock exchange. The I3 group consumes an average of 4,042.6 GWh per month electricity, where the listed consumer uses 324.8GWh per month of electricity. Yearly electricity subsidy for the I3 group consumer by August 2013 was Rp16.26 trillion per year, where the 371 listed company's consumer was Rp1.3 trillion per year. Subsidy for the 61 of the I4 consumer was valued Rp6.6 trillion per year. The government plans to cut electricity subsidies using the tariff hike for the I3 and I4 group whose companies have been listed in the stock market, gradually until the subsidy reaches its economic values. Electricity tariff hike for industries depends on the government's discussion with the House`s Commission VII that is scheduled to be held on Tuesday, Jan. 21, although the House Budget Committee has approved of the rate increase plan, in the 2014 Budget discussion. In accordance with Law No. 23 Year 2013 on State Budget 2014, the electricity subsidy allocation amounting to Rp71.4 trillion, including deficiency payments in 2013, is Rp3.5 trillion. Besides, the electricity subsidy is reserved at Rp10.4 trillion or five of the seven percent margin given to the state`s electricity company. The use of the electricity subsidy reserves must be approved by the House Budget Committee. The government claims that the planned increase in electricity tariff for large-scale industry in 2014 will not overly impact the national economy.