With Jokowi’s blessing, Sri Mulyani is ready to raise electricity rates for the rich

KOMPAS.com – Minister of Finance (Menkeu) Sri Mulyani said there would be an increase electricity rates above 3,000 volt ampere (VA) for load-sharing measures between groups of well-off households, business entities, and the government.

“Mr President (Jokowi) in the cabinet meeting, it was agreed that there may be an increase in electricity rates for those whose electricity subscriptions are above 3,000 VA. Only that segment and above,” said Sri Mulyani as quoted by Antara Between, Friday (20/5/2022).

Thus, the impact of rising oil prices (ICP) on national energy supply is not entirely borne by the State Budget (APBN).

He said the government increased the electricity subsidy as a result of the increase in ICP prices, so that there was no increase in electricity rates for people in need.

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In 2022, there will be an additional electricity subsidy of IDR 3.1 trillion from IDR 56.5 trillion to IDR 59.6 trillion.

In addition, Sri Mulyani said that there would also be electricity compensation to be given to PT Perusahaan Listrik Negara (PLN) amounting to Rp 21.4 trillion this year, which has taken into account the increase in electricity rates for customers of 3,000 VA and above.

“This compensation is given because PLN’s financial condition has worsened with the increase in ICP and no electricity tariff adjustments have been made,” he explained.

As of April 30, 2022, PLN has withdrawn a loan of Rp 11.4 trillion and will withdraw the loan again in May and June, bringing the total loan withdrawals up to June to Rp 21.7 trillion to Rp 24.7 trillion.

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If there is no additional compensation from the government, he said, in December 2022 it is projected that PLN’s operating cash flow will be in a deficit of IDR 71.1 trillion.

PLN needs to maintain the operating cash adequacy ratio to be able to pay the loan principal and interest (debt service coverage ratio/DSCR) to the borrower at least once.

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