Jakarta, the Ministry of Energy and Mineral Resources (ESDM) proposed a reduction in electricity subsidies in the 2020 budget year.
In a joint working meeting of the House of Representatives Commission VII, ESDM Minister Ignasius Jonan said that the electricity subsidy in 2020 was proposed at IDR 58.62 trillion. This amount is lower than the electricity subsidy that has been set in the electricity subsidy projection in 2019 which is Rp 65 trillion, of which the Rp 6 trillion payment will be transferred to the following year’s budget.
The reason is that there is a change in the ICP assumption, the exchange rate, etc. However, Jonan said, the amount of the subsidy in 2020 could decrease even more if the household group rate of 900 Volt Ampere (VA) and above is adjusted or increased. At present the tariff adjustment for 900 VA is still being held or in other words it is not going up.
“Note that if the electricity tariff for a household of 900 VA and above can follow the adjustment rate, the subsidy will decrease by around Rp. 6 trillion. But, if that adjustment is kept, then the subsidy will only decrease by Rp. 600 billion to Rp. 700 billion, “Jonan said when met at the DPR / MPR Building, Jakarta.