Basic power rate increase intended to reduce subsidy burden

Jakarta Forum-ANTARA News - Finance Minister Agus Martowardojo said the government`s plan to increase the basic power rate (TDL) in 2012 was intended to reduce the state budget`s subsidy burden.

"If there is no other precise and appropriate program that could be done in 2012, the power TDL rate will be increased by about 10 to 15 percent," the finance minister said here on Friday.

Besides raising the TDL tariff the government is also planning to carry out subsidy conversion from general subsidy to specific and direct subsidy so that only the poor would really be subsidized.

In the meantime, the power subsidy which has been considered high should be managed well and maintained, thus its volume should not increase.

The minister hoped that the provision of subsidy would later hit the target and the electricity consumption would be efficient.

He said that the power rate adjustment had been the government`s middle term plan because the subsidy so far given to electricity was already big but yet it had not met the target.

"We have to understand that the subsidy provided was already big enough reaching Rp57 trillion but it did not meet its target," the minister said.

Acting head of the finance ministry`s Fiscal Policy Bambang Brodjonegoro said meanwhile that the power tariff adjustment of 10 to 15 percent would be able to save on Rp15 trillion so that it would reduce subsidy of electricity to below Rp30 trillion.

"We can save Rp15 trillion on subsidy budget and total power subsidy could cut to below Rp30 trillion," he said.

Earlier, the government set Rp55.10 trillion in power subsidy in the revised 2010 state budget, but the amounts were reduced in the 2011 state budget to Rp40.7 trillion.

(Uu.A014/HAJM/H-YH)

Editor: Priyambodo RH Source: Antara News

Posted in: Agus Martowardojo,basic power rate,Finance Minister,state budget`s subsidy burden