Posted on 09 Apr 2015
Burdened by the depreciating value of the rupiah
against the U. S. dollar, industries hope that the government does not raise
the electricity tariffs anymore this year.
This is because power fares contribute some 30 percent to the production costs
borne by industries.
"We hope the government does not raise the basic tariffs of electricity
for industries this year because it will increase our production costs,"
Chairman of the Indonesian Employers Association (Apindo) for Central Java
Frans Kongi said on Tuesday.
The industrial sector bears the burden of the weakening of the rupiah against
the U. S. dollar because local industries still depend on imported raw
materials.
According to calculations, raw materials constitute 50 percent and electricity,
30 percent, of the production cost. So if the basic electricity tariffs are
raised for industries, it will have an impact on the sale prices of industrial
products.
Kongi also hopes that if the government is resolved to increase the electricity
tariffs, it should increase those for household consumers who make up the
largest customer group of state-owned electricity company PLN.
"For example, if the electricity tariffs for household consumers are
raised by Rp5,000, it will not significantly affect production and goods
prices. However, if such an increase is imposed on industries, it will have
significant impacts on production and goods prices," he explained.
Moreover, the Indonesian Chamber of Commerce and Industry (Kadin) is also of
the same opinion. It said that an increase in electricity tariffs will affect
the production costs borne by companies as power accounts for 15 to 20 percent
of the total expenditure.
"The electricity component contributes about 15 to 20 percent to the
production cost. So it will have an impact on it," Chairman of Kadin Suryo
Bambang Sulisto stated on Monday.
He added that if electricity tariffs were increased by 20 percent, production
costs would increase by about 2 percent. Despite this small increase, it will
still have a significant impact on the production cost.
Business players want electricity tariffs to be lowered so production costs can
be reduced, the Kadin chairman pointed out.
According to Kongi, the industry that will be affected the most by an increase
in electricity tariff is the textile industry, as nearly all its production
processes are supported by machines. Steel and hotel industries will be the
next most-affected ones.
Instead of raising the power tariffs, Kongi hopes that the government would
provide optimal support to the growth of domestic industries by increasing the
volume of exports.
"The strengthening of the greenback should have been utilized to boost
exports. If the turnover of industries increases, it will add to the states
foreign exchange reserves as well," the Kadin chairman for Central Java
pointed out.
State-owned power utility company PLN raised the electricity tariffs for
non-subsidized power consumers in April from those in March. The tariffs were
raised after being lowered for seven consecutive months since September 2014.
In April, the non-subsidized electricity tariff for five groups of customers
was set at Rp1,465.89 per kilowatt-hour. The tariff was raised by Rp39.31 per
kilowatt-hour, or by 2.75 percent from the Rp1,426 per kilowatt-hour rate in
March.
Following the electricity tariff hikes, some 1,000 customers in West Nusa
Tenggara urged the local PLN office to lower the capacity of their electricity
voltage.
Manger of PLN for the Mataram Office in West Nusa Tenggara province, Bagus Hari
Abrianto, noted that many non-subsidized electricity customers had asked for
the capacity of their voltage to be lowered to 900 volt-amperes to obtain
subsidized power supply.
"Customers who receive power capacity of 1,300 volt-amperes have asked us
to lower their voltage capacity to 900 volt-amperes. I do not know the exact
number of customers who requested for this, but there are more than 1,000
customers for sure," Abrianto affirmed on Monday.
He added that the customers had asked for the lowering of their power supply
capacity following rumors that PLN will raise its tariff for customers of 1,300
volt-amperes and above in May. However, the rumors were denied by PLN itself.
According to Abrianto, the planned hike of electricity tariffs for the
non-subsidized customer group will have an impact on the customers spending,
particularly on micro, small and medium enterprises who fall under the 1,300
volt-amperes category.
"There is a significant difference in tariff for the customers of 900
volt-amperes and 1,300 volt-amperes. The tariff for the former group is only
Rp600 per kilowatt-hour, while that for the latter group is Rp1,352 per
kilowatt-hour," he pointed out.
PLN has raised the tariffs of non-subsidized electrical power for April, after
it lowered them in March for the seventh month in a row since September last
year.
The tariffs of non-subsidized electrical power for five groups of customers are
set at Rp1,455.89 per kilowatt-hour, the company said on its official website
on Thursday.
The tariffs were raised by Rp39.31 per kilowatt-hour, or by 2.75 percent from
the Rp1,426.58 per kilowatt-hour rate in March.
According to data from the state power utility company, the tariffs of
subsidized electrical power for customers R1 with a capacity of 1,300
volt-amperes and customers R1 with a capacity of 2,200 volt-amperes remain
unchanged at Rp1,352 per kilowatt-hour.
The five groups of non-subsidized customers who are subjected to a tariff hike
of Rp1,465.89 per kilowatt-hour in April are middle-class households R2 with a
capacity of 3,500 to 5,500 volt-amperes, large households R3 with a capacity of
6,600 volt-amperes and above, medium businesses B2 with a capacity of 6,600 to
200,000 volt-amperes, government agencies P1 with a capacity of 6,600 to
200,000 volt-amperes, and public street lighting P3.
Moreover, the electricity tariffs for other non-subsidized customers, including
large businesses B3 with a capacity of above 200,000 volt-amperes, large
industries I3 with a capacity of above 200,000 kilo-volt-amperes and government
agencies P2 with a capacity of over 200 kilo-volt-amperes, are set at
Rp1,135.93 per kilowatt-hour, up from Rp1,105.47 per kilowatt-hour in March.
Also, the tariffs for large industries I4 with a capacity of 30
megavolt-amperes and above increased to Rp991.6 per kilowatt-hour from Rp965
per kilowatt-hour, while those for special groups L/TR, TM, and TT rose to
Rp1,542.84 per kilowatt-hour from Rp1,501.46 per kilowatt-hour.
With regard to rumors that the tariffs will increase again next month, PLN gave
its assurance that it will not raise electrical power tariffs in May.
"There will be no power tariff hikes in May. The tariffs of subsidized
electrical power for customers with a capacity of 900 volt-amperes, 1,300
volt-amperes, and 2,200 volt-amperes will not be raised either," President
Director of PLN Sofyan Basir affirmed on Tuesday.
The tariffs of electrical power for household customers with a capacity of
3,500 volt-amperes to 5,500 volt-amperes and large household customers with a
capacity of 6,600 volt-amperes and above will follow the tariff indicators in
the market, which could affect the cost of power supply, he pointed out.
