Observer: Electricity Rates Should Be Down

Jakarta – Electricity Tariffs (TTL) are considered to have decreased. This was driven by the strengthening of the rupiah against the US dollar (US), the decline in Indonesian oil prices (Indonesian Crude Price / ICP) and the stability of inflation in recent times.

Fahmi Radhi, an Economic Observer from Gajah Mada University, said there were three variables that were used as references to determine electricity tariffs, namely Indonesian Crude Price (ICP), inflation, and the rupiah exchange rate against the US dollar, and primary energy prices.

“Adjustment of the automatic electricity tariff is based on the determinant variable, which can cause electricity tariffs to rise, but electricity tariffs can also decrease compared to the previous electricity tariff, depending on the size of the determinant variable,” said Fahmi, in Jakarta.
According to Fahmi, if you look at the current Production Cost (BPP) of electricity, all the determinants of the reference reduce the amount of electricity BPP. Among other things, the rupiah’s middle exchange rate against the US dollar during July 2019 tended to strengthen reaching an average of Rp.

ICP also tends to fall in the range of USD 61 per barrel, lower than the ICP assumption price in the APBN set at USD 70 per barrel. Meanwhile, July inflation is also predicted to be low, forecasting only 0.12 percent per month or around 3.12 percent annually through 2019.

“In addition to the three indicators, the primary energy costs that determine the Cost of Production (HPP) of electricity tend to be fixed, even some primary energy prices have decreased,” he added.

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