Indonesian producers oppose power price hike plan

Indonesian producers oppose power price hike plan
Published: 12 March 2010

Indonesian business groups came out against the government’s plan to raise electricity rates by an average of 15 per cent, arguing that the increase would hurt manufacturers, the Jakarta Globe reported here on Friday.

Urip Timuryono, chairman of the Indonesian Cement Association (ASI), said domestic industries needed to become more competitive, and the rate hike would harm this effort.

"In the midst of dealing with the ACFTA, an increase in electricity tariffs is a heavy burden on our industries," he said.

Urip said he hoped the plan would be blocked. "In Indonesia democracy plays a huge role, so I hope the government finds the best solution for all parties," Urip said.

Announced on March 1, the proposed rate hikes are intended to help PLN cover its burgeoning costs. PLN, which has suffered years of losses due to selling electricity at below cost, is in the midst of a major expansion of its generating capacity to meet the continually rising demand.