PLN Lowers Electricity Rates Amid Low Oil Prices

KATADATA - The state electricity firm PLN has finally responded to industry and public demands to lower basic electricity rates this year. Head of PLN’s Commercial Division Benny Marbun said that three factors have driven this  electricity tariffs reduction.

First is the plunge in the price of Indonesian crude oil from US$ 35.48 per barrel in December 2015 to US$ 27.49 per barrel in January 2016 said Benny in an official statement made in Jakarta, Tuesday (1/3).

(Read: Electricity Rates Down IDR100 in January 2016).

Second is the decline in inflation from 0.96 percent in December 2015 to 0.51 percent in January 2016. Third is the relatively stable exchange rate of the rupiah against the US dollar. In December 2015, the rupiah was trading at IDR 13,855 per US dollar, increasing only slightly in January to IDR 13,889 per US dollar.

PLN explained that the electricity tariffs of 12 groups would decrease, from between IDR 26 and IDR 41 per kWh. The group to benefit most is industry and business, in a bid to boost the competitiveness of medium and large-scale industries. 

For low voltage users, including residences and some government offices, the tariff will decrease from IDR 1,355 to IDR 1,392 per kWh. Charges for medium voltage users, including large businesses, will drop from IDR 1,071 to IDR 1,042 per kWh. The tariff for high voltage users will decrease from IDR 959 to IDR 933 per kWh, and special service users, including premium service users, will see a drop in the basic tariff from IDR 1,573 to IDR 1,532 per kWh.

Earlier, barely a month after it raised basic electricity rates by 11.16 percent in December 2015, PLN lowered basic tariffs by an average of 7.8 percent at the beginning of this year. National electricity consumption in 2016 is estimated to be 225 terrawatt hour (TWh), an increase of 11.4 percent on the 2015 figure of 202 TWh.